The IRS has a web page that small businesses can check to see if the third party payroll provider they are outsourcing their payroll responsibilities to is complying with certain IRS requirements [SSA/IRS Reporter, Outsourcing payroll duties require an understanding, Summer 2015].
Background. Many employers outsource their payroll and related tax duties to a third-party payor (TPP), such as a payroll service provider (PSP), reporting agent, a Reg. § 31.3504-1 agent with an approved IRS Form 2678 (Employer/Payer Appointment of Agent), or a professional employer organization (PEO). The TPP may report, collect, deposit, or pay employment taxes with federal, state, and local authorities on behalf of the employer's clients. The IRS notes that the common law employer remains ultimately responsible for the deposit, payment, and reporting of federal employment tax liabilities, even if it outsources these responsibilities.
The IRS web page. The IRS web page lists payroll service providers that have passed the IRS Modernized e-File (MeF) Assurance Testing System (ATS) and/or Business Acceptance Testing (BATS) requirements for software developers, reporting agents, and transmitters of electronic business returns to the IRS.
The IRS is reminding employers that even when a payroll service is used, the employer is still responsible for filing returns and paying employment taxes. The IRS advises employers using a PSP to review their employment tax returns before they are filed to ensure they are accurate. They should also consider enrolling in the Electronic Federal Tax Payment System (EFTPS) in order to have the option of making any missed payroll tax deposits. EFTPS users can also monitor payroll tax deposits made on their behalf. EFTPS gives employers access to a 16-month history of deposits made under their employer identification number (EIN).
Don't change address to payroll service provider. The IRS also advises employers not to change their address of record with the IRS to the address of their PSP, and to not let their PSP do it either. Employers should review and respond quickly to any correspondence they receive from the IRS.
Employers may file IRS Form 14157, Complaint: Tax Return Preparer, if they suspect their PSP isn't doing everything it should.