Submit Form 2678, Employer Appointment of Agent, to the IRS

Submitted by admin on Tue, 05/04/2021 - 15:37
Policy: 

Filing a completed Form 2678 with the IRS authorizes F/EA to withhold, file and pay employment and Federal Withholding taxes on behalf of the participant. Form 2678 is not effective until the IRS approves F/EA to act on behalf of the participant employer. This approval is submitted to the F/EA with Notice LTR-1997C.

Because Form 2678 is not effective until the IRS approves the F/EA as an agent of the employer and therefore F/EA does not have joint liability for federal employer taxes until the IRS approves the Form 2678, F/EA includes language in each participant contract stating that F/EA is liable per the participant contract for employer taxes even before the IRS approves Form 2678.

Procedure: 

 
  1. <<Staff Title>> (or assigned staff member) separates Form 2678 from participant’s F/EA Start-Up package for those consumers for whom EINs were recently obtained
  2. Open Form 2678 letter template <<File Path>>
  • Collect up to 25 Forms 2678
  • Copy forms
  • Place copy of forms in consumers' folders and mail originals to IRS
  • No more than 25 Forms 2678 can be included in a single letter 
  • If more than 25 Forms 2678 will be submitted, prepare multiple letters
  • Review Forms 2678 for selected consumers
  • Ensure the participant’s EIN is written on Form 2678
  • Print completed 2678 Letter
  1. Mail 25 Forms 2678 and 2678 Letter to:

<<Insert address from IRS "Where to File" chart based on location of F/EA>>

  1. <<Staff Title>> opens Payroll System
  • In forms tracking module of payroll system, find participant by last name
  • Enter date Form 2678 mailed to IRS for each participant
  1. LTR-1997-C, notice from the IRS to approve F/EA to act as each participant’s agent should arrive by mail within 60 days
  • <<Staff Title>> opens Payroll System
  • In forms tracking module of payroll system
  • Find participant by last name
  • Enter date approval via LTR-1997-C received
  1. <<Staff Title>> reviews forms tracking module of payroll system weekly
  • Any consumers for whom 2678 approval has not been received within 75 days are followed-up on
  • <<Staff Title>> contacts IRS at 1-800-829-4933 and inquires about status of 2678 approval
  • Status is stored in participant’s Customer Service System