There are some differences between a reporting agent authorized under Form 8655, Reporting Agent Authorization (PDF) and an agent appointed using Form 2678, Employer/Payer Appointment of Agent (PDF).
A Form 8655 (PDF) reporting agent provides payroll services for one or more employers, using each client’s (employer’s) employer identification number (EIN) to file separate returns (generally e-file only) on the client’s behalf. A reporting agent may also deposit and pay taxes on the client's behalf.
A Form 2678 (PDF) agent acts as the employer, assuming liability along with the employer for the employer’s Social Security, Medicare and federal income tax withholding responsibilities. An agent appointed under Form 2678 files aggregate returns (e-file or paper) using the agent’s EIN.
The chart below illustrates the most significant differences.
Agent authority |
Form 2678 agent |
Form 8655 reporting agent (RA) |
Can file certain employment tax returns? |
Yes. The agent files an aggregate return for all clients, using the agent’s EIN. Specific types of returns the agent can file, i.e., Forms 941, 943, etc. are those shown on the Form 2678 appointment request |
Yes. The RA files a separate return on each client’s behalf, using the client’s EIN. The returns the RA can e-file, i.e., Forms 941, 943, etc., are those identified in Rev. Proc. 2007-38 and shown on the Form 8655 authorization request |
Can make deposits and payments for certain returns? |
Yes. The agent deposits and pays for tax liabilities the agent has aggregated and reported using the agent’s EIN, according to the agent’s deposit requirements |
Yes. The RA deposits and pays tax liabilities on behalf of each client, using the client’s separate EIN, according to each client’s deposit requirements |
Has employment tax liability? |
Yes. The client and the agent are both liable for paying the employer’s employment taxes, filing returns, and making deposits and payments for the taxes reported, per the Form 2678 authorization |
No. The client, not the RA, remains liable for ensuring that all tax returns are filed timely and all deposits and payments are made timely |
Can file Form 940(PDF), Employer’s Annual Federal Unemployment (FUTA) Tax Return?
|
In most cases, no.* Clients must file annual FUTA tax returns using their own EINs |
Yes. The RA files separate returns on each client’s behalf using the client’s EIN |
Applicable guidance: |
Rev. Proc. 70-6
Notice 2003-70 (state and local governmental agents) |
Rev. Proc. 2007-38 |
*Exceptions may apply for an agent where the employer is a disabled individual or other welfare recipient receiving home-care service through a state or local program.
References/Related Topics
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