Outsourcing payroll is often a very smart thing for business owners to do. This allows them to concentrate on what they do best while avoiding all the work and potential penalties from making errors.
But the IRS is encouraging all firms that outsource payroll tax duties to third parties to use the Electronic Federal Tax Payment System (EFTPS.gov). Business owners can verify that all deposits are being sent to the IRS on a timely basis.
Remember that firms that use payroll agents remain liable for unpaid taxes, even if they paid the taxes to the payroll provider who then failed to make the payment for any reason. This can easily become a very large liability.
As President Reagan famously said, “Trust but verify!”