August 8, 2005
ETA REGIONAL INFORMATION ALERT 084-05
ORIGINATING OFFICE: Region 5
SUBJECT: FYI – WOTC Information
PROGRAM(S): WOTC
1. Purpose. To transmit information on recent developments in the Work Opportunity Tax Credit (WOTC) program.
2. References. None.
3. Links. This Alert is in the Regional website archive at: http://www.doleta.gov/regions/regionalresources
4. Background. Recently, a merger took place among four WOTC consultants - TBT, Net-Profit, Glick & Glick, and Johnson & Associates. These entities are now operating as TALX. This merger has raised concerns among some WOTC State Coordinators regarding the validity of existing Powers of Attorney (POAs). It has been reported that:
- None of the individuals delegated POAs for former TBT clients now work under the new combined operation; and
- The certification requests (IRS Form 8850) submitted to the States are now being stamped with TALX/Net Profit/TBT as the employers’ representative and contact.
- No redelegation of authority exists (in the form of a signed release or POA) for an individual in TALX to represent employers in conducting WOTC business.
While just two States have reported these concerns, there may be others affected since the consultants represent businesses nationwide.
5. Substance. On August 1, 2005, ETA National Office management and the WOTC National Coordinator held a conference call with representatives of the four WOTC consulting companies, and Internal Revenue Service (IRS) experts on POAs, to obtain information to address the States’ concerns.
Each of the four merging partners explained that a letter was sent to all the States where they conduct WOTC and Welfare-to-Work Tax Credit business to inform State Workforce agencies (SWAs):
- Of the effective date of the merger; the new corporate identity (TALX); and the names of the four companies involved;
- That each of the merging companies is retaining its full staff as listed in current POAs in each SWA nationwide; and
- That new POAs will be issued to replace the current POAs close to their expiration date or as needed to identify replacement individuals authorized to conduct WOTC business on behalf of the employers TALX represents.
IRS GUIDANCE
Representatives from the IRS provided the following guidance:
Current administrative practice is to allow agents [consultants] to assist employers in filing Form 8850 for purposes of the Work Opportunity and Welfare to Work Credits by having the employers complete a Form 2848, Power of Attorney and Declaration
of Representative. As set forth in the Instructions to the Form 2848, the purpose of the Form is to designate individuals, and "only individuals may be named as representatives." See also, 26 CFR 601.502. The Form 2848 cannot be used to authorize firms or companies to act on behalf of a principal. Accordingly, since an individual is the entity designated to be a representative, not the company that the individual may have worked for, the merger of companies that employ these agents should not affect the validity of the Form 2848, until the Form 2848 is revoked, or unless State law provides otherwise.
6. Action. Program Administrators are invited to share this Information Alert with appropriate staff and other agencies. The following procedure is recommended for handling/processing certification requests received from TALX, or otherwise identified as
TBT/Net Profit/TALX:
- On receipt of a certification request (Form 8850), State Coordinators should verify that the name of the individual listed on the Form 8850 as Person to contact, if different from above, (under the section entitled: For Employers Use Only) is the same as the one listed in the current unexpired POAs on file.
- If a valid POA does not exist, the State Coordinator should send each affected employer a letter requesting that a new POA, (Form 2848, Power of Attorney and Declaration of Representative), be submitted within 30 calendar days from receipt of IRS Form 8850. This Form 2848 submittal should clearly designate, by name, the individual listed on the IRS Form 8850 as authorized to represent the employer.
- When feasible, WOTC State coordinators may follow-up with a telephone call to the affected employers.
- Upon receipt of the new POA, each WOTC State Coordinator should process the Form 8850s on file and all such future requests, and issue the corresponding determinations (certification or denial with reason for the denial) in a timely manner.
This process should prevent States from accumulating unprocessed certification requests that will increase their backlogs and reduce or exhaust their funds.
7. Contact. Comments or questions about this WOTC guidance may be directed to the Office of System Performance in your Regional Office:
Region 1 Boston – 617.565.3630
Region 2 Philadelphia – 215.861.5200
Region 3 Atlanta – 404.562.2092
Region 4 Dallas – 214.767.8263
Region 5 Chicago – 312.596.5400
Region 6 San Francisco – 415.975.4610
Comments or questions about the format of this Alert may be directed to Tom Coyne on 312.596.5435.
8. Expiration Date. Continuing
9. Attachment. None
