Obtain Separate Federal Employer Identification Number & Employer Agent Status
F/EA obtains approval from federal authorities prior to serving as an agent of employer for consumers in the Participant Direction Program. F/EA begins issuing payments to consumers’ employees or withhold taxes from payments prior to active authority from federal tax agencies to serve as an Employer Agent pursuant to the Fiscal Employer Agent Agreement. The F/EA is not aware of any situation whereby the IRS has denied approval. Policies and Procedures relating to filing for and obtaining approval on behalf of each participant are documented in Submit Form 2678, Employer Appointment of Agent, to the IRS.
F/EA obtained a separate Employer Identification Number (EIN) specifically for the purpose of filing and depositing Federal Income Tax, Social Security, Medicare and FUTA taxes on behalf of consumers, under Section 3504, Rev. Proc. 70-6, Proposed Regulations REG-137036-08 of January 13, 2010 or under Revenue Procedure 2013-39. That EIN is used for all Federal tax filing, payment and remitting purposes for all consumers active in the F/EA program.
The August 2014 IRS Form 2678 instructions state that an agent (F/EA) is not liable for filing any federal tax returns or making any deposits or payments until it receives approval from the IRS to act as an agent for an individual. Therefore, during the period from when the agent files the IRS Form 2678 for an individual until the agent receives IRS agent approval for that individual, F/EA includes in F/EA's contract with Program Administrator that F/EA is responsible for filing and depositing federal employment taxes and any unfulfilled federal tax obligations, including penalties and interest even before the IRS approves the IRS Form 2678.
F/EA includes the above language in all contracts executed with Program clients.
1. Maintain a separate EIN specifically for the purpose of filing and depositing Federal Income Tax, Social Security, Medicare and FUTA taxes on behalf of participant, under Section 3504, Rev. Proc. 70-6, Proposed Regulations REG-137036-08 of January 13, 2010 of the Internal Revenue Code and under Revenue Procedure 2013-39.
- F/EA obtained a separate EIN on <<Date>>. That EIN is <<12-3456789>>.
- This EIN is used to file and deposit all Federal Income Tax, Social Security, Medicare and FUTA taxes on behalf of consumers in the Participant Direction Program
2. Include IRS Form 2678 in each participant’s enrollment packet (See Policy and Procedure Chapter <<X>>)
3. Each participant must sign a Form 2678 authorizing F/EA to be appointed the participant’s agent under Section 3504, Rev. Proc. 70-6, Proposed Regulations REG-137036-08 of January 13, 2010 of the Internal Revenue Code (See Policy and Procedure <<X>>)
4. F/EA submits an executed Form 2678 to the IRS for each participant on whose behalf F/EA pays wages to the participant’s workers (see Policy and Procedure document <<X>>.
5. F/EA receives notice LTR-1997-C authorizing F/EA to act as agent of each participant
6. F/EA maintains these notices in each participant’s electronic file (See Policy and Procedure <<X>>)
7. F/EA obtains Tax Information Authorization per IRS Form 8821.
8. Each participant should sign a Form 8821 authorizing F/EA to act on behalf of the participant for purposes of obtaining prior EINs.
9. F/EA retains an executed Form 8821 in electronic files for each participant on whose behalf F/EA pays wages to the participant’s workers(s) (see Policy and Procedure document <<X>>). The Form 8821 is only filed in the event it is needed to obtain participant information from the IRS.
10. Include Form SS-4 in each participant's enrollment packet.
11. Each participant must sign a Form SS-4 allowing the F/EA to attain an EIN for the participant.
12. The EIN is obtained by calling the IRS and referring to the participant as a "Home Health Care Service Recipient".
The internal controls used by F/EA to monitor this process are:
1. The SS-4 containing F/EA’s separate Agent EIN is stored in a locked file drawer in the FEA Coordinator office until all required information is complete, all documents are scanned into electronic files which have limited access by aurhorized personnel only.
2. All completed Forms 2678 are scanned and maintained per File Retention Policy for a minimum of 7 years
3. All completed Forms 8821 are scanned and maintained for a minimum of 7 years
4. All IRS Forms LTR-1997-C authorizing F/EA as agent of the employer are scanned and maintained for a minimum per File Retention Policy of 7 years.
5. All completed Forms SS-4 are scanned and maintained per File Retention Policy for a minimum of 7 years.
| Attachment | Size |
|---|---|
 Section 3504.doc | 23 KB |
 IRS Rev. Proc. 70-6.pdf | 82.35 KB |
| REG-137036-08-1.pdf | 362.46 KB |
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