IRS Announces One Year Delay in Accepting Applications for Certified Professional Employer Organizations

The IRS has announced that it is pushing back for one year the date on which it will begin accepting applications for entities to be classified as a certified professional employer organization under IRC §§3511(a)(1) and.7705.

These organizations, created as part of the Achieving a Better Life Experience (ABLE) Act of 2014, would provide protection for employers who use such organizations regarding the payment of payroll taxes.  Employers generally are responsible for the deposit of taxes withheld from their employee’s payroll and, prior to this provision, that responsibility could not be shifted to another party.

The law provided that the law would take effect on January 1, 2016 and that the IRS would begin accepting applications no later than July 1, 2015.  However the month of July passed without the IRS beginning the application process.

On August 5, 2015 the IRS announced they would not begin to accept applications unit a full year after that date by a post on their website.

The IRS explains this by stating:

Since the law’s enactment, the IRS has been working steadily to identify and define the policy, procedural, and information system changes necessary to meet the requirements of the new law. Meeting these requirements, and doing so in a way that balances customer service with the interests of tax administration, will take additional time and resources.