Workshop . . . May 24, 2007

Electronic Filing Is the Way to Go for Payroll Departments, Practitioners Say

Workshop:
Electronic Filing

Speakers:
»Martin Armstrong, director of payroll, Harrah's Entertainment Inc.
»Bill Bates, president, Colorado Payroll Consulting Inc.

Various Internal Revenue Service and Social Security Administration forms can be filed electronically, Martin Armstrong, Harrah's Entertainment's director of payroll, and Bill Bates, president of Colorado Payroll Consulting, told the Electronic Filing workshop at the 25th annual APA Congress in Las Vegas. Among them are Forms W-4, 940, 941, W-2, and W-2c and the 1099 series.

Armstrong discussed the Electronic Federal Tax Payment System and details related to electronic W-2s, predicting that 60 to 70 percent of employers will supply W-2s electronically to their employees in the next five years. Employees should not be allowed to consent via paper to receiving W-2s electronically, because employers need to see whether their employees can properly use the system, Armstrong warned.

Taxpayers do not transmit returns to IRS directly, but rather use reporting agents and transmitters, Armstrong told participants, although transmitters do not have signature authority for taxpayers.

Bates discussed SSA's e-services, including the Social Security Number Verification System, which authenticates SSNs for employers. This system can now tell employers if an SSN holder is dead or if the number is being used fraudulently, Bates told participants.

Bates urged employers to use either SSNVS or the Basic Pilot Program for employment eligibility verification because these can give employers a safe harbor from IRS or Citizenship and Immigration Services/Immigration and Customs Enforcement penalties, respectively. However, "neither tells you the worker is who they say they are, is the worker whose ID you checked," Bates warned.

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