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.
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