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HarryR
May 18, 2008, 11:29 AM
I've been asked by one of my clients to start handling their payroll services for their employees? I checked and don't appear to need a license in Michigan. I've also called the IRS and the Department of Labor & Economic Development to seek more advise to ensure accuracy in this area. However... my questions were not completely answered.

My questions are:

1.) Should I obtain a bond or possible insurance to protect me & my business? I'm concerned for "possible" penalities from the IRS?

2.) Would a bond or insurance cover me against financial penalties?

My goal is to be compliant in all areas and also show due diligence regarding payroll services.

Thank you!

excon
May 23, 2008, 06:28 AM
Hello Harry:

If Michigan says you don't need a license, then you don't. The IRS or any of the federal bureaucrats wouldn't know anything about state law. I wouldn't call them.

Sure, you should have insurance. But, it won't protect you against penalties from the IRS. The only thing that will protect you there, is filing out your tax records correctly...

By the way, they're NOT concerned with WHAT your business does... They're only concerned that YOU pay YOUR taxes for THAT business.

There is NO bond or insurance that will protect you from those things. If you hire a CPA to do your taxes, that's the best defense I can think of.

excon