For many employers, payroll challenges are no longer limited to tax withholding and wage calculations. Today’s payroll environment requires organizations to apply federal, state, local, collective bargaining, and in some cases country-specific rules to a workforce that may be working across multiple jurisdictions.
If you’ve ever been forced to pay a penalty because a tax deposit was even a day late, you begin to understand how important this has become. Some of those changes include…
1 – Changing jurisdictional requirements, large volumes of workforce data, and limited room for error.
2 – States such as California highlight how payroll compliance is closely tied to timekeeping, scheduling, job changes, meal-period data, and workforce activity.
3 – Multistate payroll risk increases when organizations struggle to determine which requirements apply and whether underlying workforce data is accurate.
4 – Payroll corrections, audits, and compliance exposure are often downstream symptoms of workforce data problems occurring well before payroll calculation.
Payroll professionals and advisors are increasingly focused on governance, data integrity, exception monitoring, and documentation as part of a broader payroll operating framework.
Let me leave you with this…
I’m writing this column today because we’ve been retained by two businesses to handle payroll audits that were caused by their payroll services. Take a moment and think about how unfair this situation really is.
You hire a payroll service to handle your payroll. You think that everything is just ducky until you get a nastygram from the IRS or a state demanding that you pay some ridiculous amount of money.
You call your payroll service to discuss the problem and can’t get anyone on the line. So you leave a message, send an email, and again receive no response.
This situation is as common as the rain, but the two audits I’m about to describe should never have happened. The first is in reference to a smaller payroll service that didn’t make the client’s payroll tax deposits.
The agreement that the client signed specifically states that the service will make the deposits. And they did for a time, until they just stopped for one reason or another.
The service withheld the tax deposits but failed to remit them. This happens frequently with smaller services that have problems paying their bills.
Now the client is getting hit with a $120K tax bill. I’ve seen this situation on several occasions, and very little can be done for the client.
The client can try to sue the payroll service, but that likely won’t be effective.
1 – A Supreme Court ruling specifically states that when this happens, it’s the client’s fault for not catching and correcting the problem.
2 – They can certainly sue the payroll service for the money. But five or six years from now once they get a judgement and $50K to $75K in attorney’s fees won’t guarantee anything. The service will probably be bankrupt by then.
The only thing I’m going to be able to do on this is to maybe get some penalties reduced and put a payment plan in place.
The second audit involves a client with a multi-state payroll. It literally was a matter of the client not clicking a couple of boxes when setting up the new individual states.
Again, the payroll service has taken the position that the client should have known better and is offering no solution whatsoever. The State tax deposits weren’t made leaving the client with a $37K problem.
Both of these situations come down to a complete lack of customer service and inattention on the side of the service. These payroll providers expect you to be a computer programmer who is familiar with the individual tax laws of the Fed and the states in order to get the payroll handled correctly.
If you make the mistake of asking them a question, they give you an 800 number to the taxation agency and ask you to fix it yourself. This is why I own a payroll service named Salary Solutions.
Because payroll when handled by actual public accountants is handled properly.
When you call my offices, a real person answers the phone and gets you to the person who can handle your situation. We never ask our clients to set up anything. Why? Because we’ll do it correctly.
We offer all the bells and whistles that other payroll services offer. So if you have any difficulties with your accounting and tax work, I’m waiting for you to contact me.
We’re all going to get through this. Let’s get through it together..
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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