Small Business Payroll Protection Act of 2013 - Amends the Internal Revenue Code to require the Secretary of the Treasury to establish a registration system for payroll tax deposit agents (defined as any person that provides payroll processing or tax filing and deposit service to one or more employers). Requires such agents to: (1) submit a bond or to submit to quarterly third-party certifications, (2) make certain disclosures to their clients concerning liability for payment of employment taxes, and (3) pay penalties for failing to collect or pay over employment taxes or for attempting to evade or defeat payment of such taxes.
Requires the Secretary of the Treasury to: (1) issue a notice of confirmation of any address change for an employer making employment tax payments, and (2) send such notice to both the employer's former and new address.
Requires officers or employees of the Internal Revenue Service (IRS) who are evaluating an offer-in-compromise of a tax liability to give special consideration to an offer from a taxpayer who has been the victim of fraud.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 900 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 900
To amend the Internal Revenue Code of 1986 to regulate payroll tax
deposit agents, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 8, 2013
Ms. Mikulski introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to regulate payroll tax
deposit agents, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Payroll Protection
Act of 2013''.
SEC. 2. REGULATION OF PAYROLL TAX DEPOSIT AGENTS.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 7529. PAYROLL TAX DEPOSIT AGENTS.
``(a) Registration.--
``(1) In general.--The Secretary shall establish a system
to require the initial registration and the annual renewal of
the registration of persons seeking to act as payroll tax
deposit agents authorized to make Federal employment tax
deposits on behalf of employer taxpayers. Such system shall
also--
``(A) establish a registration and renewal fee for
each payroll tax deposit agent in an amount not to
exceed $100,
``(B) provide the payroll tax deposit agent the
option of either submitting a bond as specified in
subsection (b) or submitting to a quarterly
certification as specified in subsection (c),
``(C) require such disclosures as are specified in
subsection (d), and
``(D) provide penalties for unregistered persons
acting as payroll tax deposit agents with respect to
Federal tax deposits and for payroll tax deposit agents
who fail to furnish such disclosures as are specified
in subsection (d), in an amount not to exceed $10,000
for each 90 days of noncompliance.
``(2) Definition of payroll tax deposit agent.--For
purposes of this section, the term `payroll tax deposit agent'
means any person which provides payroll processing or tax
filing and deposit services to 1 or more employers (other than
an employer acting on its own behalf) if such person has the
contractual authority to access such employer's funds for the
purpose of making employment tax deposits. Such term shall not
include any person which only transfers such funds to the
appropriate government authority (regardless if such person has
the authority to determine the amount of such transfer) and
does not otherwise have the authority to access such funds.
``(3) Employment tax.--For purposes of this section, the
term `employment tax' includes unemployment insurance
contributions.
``(b) Bonding.--
``(1) In general.--If a payroll tax deposit agent elects to
submit a bond under subsection (a)(1)(B), the amount of such
bond shall be not less than $50,000 nor more than $500,000, and
shall be determined with respect to each payroll tax deposit
agent under regulations prescribed by the Secretary.
``(2) Surety.--Any bond or security furnished pursuant to
this section shall be in such form and with such surety or
sureties as may be prescribed by regulations issued pursuant to
section 7101.
``(3) Evidence of bond.--Evidence of such bond shall be
filed with the Secretary with the initial registration and each
annual renewal of the registration of persons licensed to act
as payroll tax deposit agents.
``(c) Quarterly Certifications.--If a payroll tax deposit agent
elects to submit to a quarterly certification under subsection
(a)(1)(B), such certification shall be performed by an independent
third party who is qualified to perform such certifications under
targeted criteria established by the Secretary, at the direction of the
Secretary, and shall be based on the following narrowly targeted
principles--
``(1) that the escrow account of the payroll tax deposit
agent in which such agent holds its employers' taxes is
balanced to the total of quarterly reconciliation statements
(i.e., Internal Revenue Service Forms 941 and State
equivalents), and any liabilities collected but not yet
deposited with the respective government authority,
``(2) that the escrow account funds of the payroll tax
deposit agent are not commingled with such agent's operating
funds,
``(3) that there is no evidence that the payroll tax
deposit agent used any of the funds in such agent's escrow
account to pay such agent's operating costs, and
``(4) that there is adequate receipt evidence that such
agent paid the required employment taxes on behalf of the
employers to the proper government employment tax authority.
A copy of each completed quarterly certification report shall be filed
quarterly with the Secretary and no payroll tax deposit agent shall
obtain its annual renewal of the registration of persons licensed to
act as payroll tax deposit agents unless all such copies have been
filed.
``(d) Disclosure.--The Secretary shall require payroll tax deposit
agents to disclose to each client prior to or at the time of
contracting for payroll services, and to each existing client at least
quarterly--
``(1) the client's continuing liability for payment of all
Federal and State employment taxes notwithstanding any
contractual relationship with a payroll tax deposit agent,
``(2) the mechanisms available to the client to verify the
amount and date of payment of all tax deposits made by the
payroll tax deposit agent on behalf of such client, including
the Internet address and telephone number of each Federal and
State employment tax authority related to such deposits, and
``(3) such other information that the Secretary determines
is necessary or appropriate to assist employers in the
selection and use of payroll tax deposit agents.
``(e) Tax Deposits and Returns.--Only persons registered under this
section may--
``(1) make Federal tax deposits on behalf of an employer,
``(2) sign and file Federal employment tax returns on
behalf of a taxpayer, and
``(3) have access to confidential tax information relating
to such employer.
``(f) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section.''.
(b) Quarterly Certification Criteria.--In establishing the criteria
for the quarterly certification required under section 7529(c) of the
Internal Revenue Code of 1986, as added by subsection (a), the
Secretary of the Treasury shall ensure, to the extent practicable, that
the burden of the certification process on the payroll tax deposit
agent is minimized.
(c) Payroll Tax Deposit Agents Subject to Penalty for Failure To
Collect and Pay Over Tax, or Attempt To Evade or Defeat Tax.--
(1) In general.--Section 6672(a) of the Internal Revenue
Code of 1986 is amended by inserting ``, including any payroll
tax deposit agent (as defined in section 7529(a)(2)) who has
assumed the obligation to pay over any tax by contract with a
taxpayer (but only to the extent that such payroll tax deposit
agent has received irrevocable payment of funds for the
corresponding tax liabilities from such taxpayer),'' after
``imposed by this title''.
(2) Penalty not subject to discharge in bankruptcy.--
Section 6672(a) is further amended by adding at the end the
following new sentence: ``Notwithstanding any other provision
of law, no penalty imposed under this section may be discharged
in bankruptcy.''.
(3) Conforming amendment.--Section 6672(b)(1) of the
Internal Revenue Code of 1986 is amended by striking the word
``taxpayer'' and inserting the word ``person'' each time it
appears.
(4) Construction.--The amendment made by paragraph (1)
shall not be construed to create any inference with respect to
the interpretation of section 6672 of the Internal Revenue Code
of 1986 as such section was in effect on the day before the
date of the enactment of this Act.
(d) Clerical Amendment.--The table of sections for such chapter 77
is amended by adding at the end the following new item:
``Sec. 7529. Payroll tax deposit agents.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Penalty.--The amendments made by subsection (c) shall
apply to failures occurring after the date of the enactment of
this Act.
SEC. 3. VERIFICATION OF ADDRESS CHANGE.
(a) In General.--Chapter 25 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 3511. VERIFICATION OF ADDRESS CHANGE.
``The Secretary shall issue a notice of confirmation of any address
change relating to an employer making tax payments under this subtitle,
and such notice shall be sent to both the employer's former and new
address.''.
(b) Clerical Amendment.--The table of sections for such chapter 25
is amended by adding at the end the following new item:
``Sec. 3511. Verification of address change.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 180 days after the date of the enactment of
this Act.
SEC. 4. OFFER-IN-COMPROMISE REQUESTS BY VICTIMS OF FRAUD.
Section 7122(d)(3) of the Internal Revenue Code of 1986 is
amended--
(1) in subparagraph (B)(ii), by striking ``and'' at the
end,
(2) in subparagraph (C), by striking the period at the end
and inserting ``, and'', and
(3) by adding at the end the following new subparagraph:
``(D) an officer of employee of the Internal
Revenue Service shall give special consideration to an
offer-in-compromise from a taxpayer who has been the
victim of fraud.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line