No one likes to hear they are going to be audited or inspected by the Internal Revenue Service (IRS), or Department of Labor (DOL). If you have taken the proper steps and are well-prepared, there will be nothing to worry about. This is just one of the benefits of having a professional payroll service. They ensure that businesses are compliant in every way.
Why Outsource Payroll to Professionals?
According to the American Society of Pension Professionals & Actuaries, the DOT and IRS look for different things.
The DOT is concerned that people’s rights are being upheld. The Employee Benefits Security Administration (ESBA) is most concerned about individuals’ eligibility, claims, payments, and other fiduciary activities, including:
- Exercising exclusive benefits rule
- Overseeing the security of investments
- Maintaining the security of the administration
- Recognizing conflicts of interest
- Looking for signs of prohibited transactions like deferrals and loan payments
The IRS is looking for trends in behavior and looks to ensure that the proper financial procedures are being followed. When they conduct tax audits, they are looking for errors in tax situations, including:
- Income and excise taxes
- Tax penalties
- Proper deductions
- Limits on benefits
- Proper funding
- Proper eligibility and vesting
The one common interest that ESBA and IRS share is proper reporting and disclosure.
When you outsource your payroll and tax reporting to experts, you don’t have to worry about these things. No matter what business you are in or where you are located your expert payroll team will make sure that a business is compliant in every area. Experience matters in these situations, so choosing the right company at the outset is an important decision.
Choosing a Professional Payroll Provider:
With professional companies that provide outsourced payroll solutions, you have a team of professionals to support you and your business should you be audited by the DOT or IRS.
They can provide many financial services so business owners can concentrate on their business. They should provide:
- Set up payroll accounts.
- Payment method set up.
- Track employee time worked.
- Calculate wages and delivery of payment.
- Set up for paper checks or direct deposit.
- Develop safety measures to keep company and employee information secure.
- Ensure compliance with government regulations.
- Set up withholding for each employee. This may include payroll taxes, income taxes, and garnished wages, alimony/child support payments, and 401K, savings plans.
- Remit all taxes to federal and local tax entities.
- Completing year-end taxes and issuing employee W-2s.
- Provide support during audits.
If you have had tax issues in the past (like you had a bad bookkeeper), or if you are looking to make your payroll processing easier, you can’t go wrong without sourcing payroll activities. It doesn’t only make your life easier, but you will have the peace of mind knowing that your company is compliant. If you are audited you will also have the support of professionals to walk you through each step of the audit.
And while it’s a minor note, we thought it was worth mentioning the value of a forensic bookkeeper if you suspect issues going on with your bookkeeping. Investigative accountants can find embezzlement, time clock fraud, tax issues, payroll issues, issues with benefits, record-keeping errors, and so much more. If you want to avoid the IRS altogether, you might look into one of these professionals. Our outsourced payroll solution company above also does forensics in your books, so consider checking out Remote Quality Bookkeeping.