PEO's and ERC

Technical topics regarding tax preparation.
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We were discussing this in another thread which is down the list quite far now. Basically, when I started asking my client's PEO for information to respond to a letter from IRS RE their ERC, the PEO said, they had recently been informed by IRS that they are responsible for taking care of applying for the ERC for their clients who qualify. They were working with their attorney to see what they needed tod do. Today, I asked for an update, and this is the email I received from them:

"So here is what we is going on. The IRS changed rules in the middle of the program. Shoer story long we just filed Q3 2021 but have done it under our EIN number without using the Schedule R for the independent clients. Once we get the tax credit (hopefully) we then are responsible to provide the tax credit to every client for who we have listed in the Schedule R based on their circumstances.

Pretty much the IRS has said we give you the credit and now is your responsibility to spread and if you do it wrong we reserve the right to come after you versus the individual client, based on the logic we are the employer and we have the responsibility."

There have been tons of questions about PEO's and the ERC and most PEO's have not been terribly helpful, so those clients have most likely not applied for ERC. We'll see where this ends up going. I'm curious if anyone else whose client's use a PEO have heard anything about this.
 

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