New Updates Regarding CPEOs

On November 1, 2016, a notification from Sax was sent describing the “New Certification for Professional Employer Organizations” which can be found here.

There are now two new updates regarding Certified Professional Employer Organizations (CPEOs):

  • The IRS recently released the first list of approved CPEOs. Unless your CPEO is on this list, it does not qualify as a CPEO. This list can be found here.
  • A new form was created by the IRS – Form 8973. This is the Certified Professional Employer Organization/Customer Reporting Agreement, and is to be used by the CPEO to notify the IRS that a service contract between the CPEO and the customer has started or ended. It will provide the following:
  1. Why the form is being filed
  2. Who the customer is
  3. The forms the CPEO will file
  4. Information on the CPEO
  5. Information on the relationship with the CPEO
  6. Authorization for the CPEO to release information to the IRS

The CPEO will complete Parts 1, 2, 3, 4 and 6 of Form 8973, and the company should review this information before signing Part 5.

If you have any questions about these updates to the CPEO designation, please contact Alan S. Isaacs, CPA, MBA at [email protected].

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