|
PEOs have historically been considered as the employer of the leased employees and have taken the federal hiring credits. For purposes of FUTA, the common law employer is the entity entitled to the federal hiring tax credits. In 2004, the IRS and the Tax Court addressed the common law employer issue. In a General Counsel Memorandum, it was held that the common law employer is the entity that does the hiring and firing, oversees the day-to-day activities, has behavioral control and is the ultimate obligor for the employees' wages. This same issue was addressed in the Tax Court's case of Transport Contract Leasing, Inc. where the Tax Court held the leasing company was the common law employer. Many PEOs rely on this case; however, the facts of this case are far different than normal PEO activities. The facts of this case are more like a temporary staffing arrangement and a placement of an employee. The leasing company did hiring and firing, managed employee behavior and was liable for paying the employee regardless of whether they received funds from the leasing client. Each PEO must weigh its client relationship to determine the common law employer. If the PEO can pass the common law employer test, then the PEO is entitled to the credits; however, in most cases, the PEO client will be the common law employer for purposes of FUTA.
If the PEO is the common law employer, TaxBreak can assist the PEO in retrieving the tax credits for the PEO. If the PEO client is the common law employer, a Referral Partnership with TaxBreak allows the PEO client to take advantage of this capital recovery company's proprietary, leading-edge technology and years of experience which researches / identifies / processes federal and state tax credits, government incentive programs and other expense reduction and capital recovery opportunities. This partnership will generate recurring revenue streams that will improve the financial performance of clients while adding value to your offering with a return on investment (ROI) that will make your services an easy "YES" for new prospects and give you a strategic advantage that differentiates your PEO from others and keeps it from being vulnerable to more advanced competitors.
Benefits to PEO
- Client retention
- Gain access
- Cost justification
- Generate additional revenue
- Protection against predatory marketing
Benefits to PEO Client
- Decrease tax payments
- Increase cash flow
- High ROI service
- Fees are paid only if benefits are earned
Many PEOs now have a tax credit product that they aggressively market to new clients. They position this product as a way for clients to pay for the PEO services through tax savings.
Most tax credit products are time consuming and difficult to administer. Most utilize a phone bank where each applicant has a 5-7 minute phone call in which the hiring manager has to get on the phone. If the new hire qualifies, the manager must pull shelf forms, have the new hire complete them and, then, send them to the provider.
TaxBreak's screening methods eliminate up to 86% of the paperwork and give the ability to target credit-eligible applicants in the hiring process. TaxBreak offers several processing options to coordinate with current hiring practices which can turn Human Resources Departments into profit centers. TaxBreak uses one short form to initially screen job applicants or new hires and provides all pre-filled necessary forms for the new hire to sign. The process takes 2 minutes per applicant and multiple applicants can be screened at the same time. TaxBreak works on a contingency fee basis; so, there is no financial risk to TaxBreak's clients.
TaxBreak will enable your company to stay competitive, offer an advanced value-added product, retain clients, gain access, justify costs and generate additional revenue and, at the same time, provide tremendous benefits to your clients. Our experience and expertise, coupled with our technology, enable us to provide clients with unparalleled service.
Please contact us at (888) 291-1938 ext.16 if you are interested in TaxBreak's Referral Program.
 Back to Partnership Information
|
