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IRS issues proposed rules (REG-102966-10) on the designation of a payor as agent to perform acts required of an employer. The rules explain the circumstances under which a payor is designated as an agent to perform the acts, and is liable for employment taxes when it comes to wages or compensation paid by the payor to someone performing services for the payor's client under a service agreement. The rules pertain to three-party arrangements when the employer enters into an agreement with a third-party payor under which the payor performs the employment tax obligations of the client, with regard to wages or compensation.
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