For professional employment organizations or PEOs, January 1st of this year marks the start of the Internal Revenue Service‘s voluntary certification program. This certification could help PEO’s and other professional HR outsourcing companies instill a greater degree of trust in their clients and those who may be considering using a PEO in the future.
In a recent article that appeared on the Bloomberg BNA website, in order for a PEO to qualify for IRS certification qualifications must be met. These qualifications include submitting audited annual financial statements, as well as submitting a written opinion of an independent and certified CPA that can attest to the organization’s financial health and “reflect positive working capital for the fiscal year or satisfies the exemption of positive working capital, are among the requisites. The opinion submitted by the CPA regarding the PEO must also be accompanied by a calculation of the PEO’s working capital along with financial statements that have not been audited for the most recently completed fiscal quarter.
The Value of IRS Certification for PEO’s
In order to maintain a ‘certified’ status with the IRS, the PEO must submit this documentation as well as yearly audits in order to ensure trust. As Hill reports, this level of scrutiny is reassuring to both the IRS and to the U.S. Treasury Department and such PEO’s are considered to be a lower risk factor for the collection of taxes than those organizations that do not have certification.
PEO’s handle payroll tax collection and reporting and other related functions for their clients. Being recognized as being certified by the IRS can instill further trust in clients because these organizations meet the requirements of financial viability, bonding, tax collection, business experience and compliance to federal, state and local rules regarding these services.
At NetPEO, we offer a full range of services to our clients to address all of their human resource needs through our network of highly qualified PEO providers. Our services include brokerage services, employee leasing, employee administration and training, management and administration of employee benefits, payroll, employer liability management services, risk management, and worker’s compensation. No matter what your human resource needs are NetPEO’s alliance partners can help you to address them. Quality and attention to service is what sets NetPEO apart from all of the rest. Unlike other similar PEO’s, we will be there for you and your business after your PEO services have been set up. Contact us today to find out how we can help by calling the number at the top of your screen.