Should My PEO Be Certified By The IRS?

Looking to the PEO industry is a well-respected way to help small and mid-sized businesses offer more benefits than they ever could on their own. In fact, the promises that a PEO makes to drastically reduce benefits costs to a small or mid-sized business may leave some of them coming to the misinformed conclusion the offer is simply too good to be true. Is there a way to validate the claims? The IRS is now offering a voluntary certification as a way for PEOs to be verified as a good PEO to work with by the United States government. With hundreds of PEOs to choose from, the question in anyone’s mind ought to be, “Should my PEO be certified the IRS?” Most business owners and human resources managers would naturally want to work with any vendor that was certified in their industry. Such a certification has existed in the PEO marketplace before anyone thought about an IRS certification. NAPEO, a governing body in the PEO industry, offers paths to certification on their website outside of the IRS. This came especially at a time when PEOs were making headway in the marketplace and business owners and human resource managers were just getting their heads around how a PEO worked. Trouble is, if you didn’t know a PEO organization like NAPEO existed, then you wouldn’t know that a certification for a PEO was in existence. 

Should My PEO Be Certified By The IRS To Keep My Business? 

At this time, the certification offered by the IRS is voluntary. The good news for any PEO looking to be certified is that the path to certification is relatively easy and starts with an online registration to get the ball rolling. It would stand to reason that a PEO with a sketchy past is probably not interested in working with the IRS towards certification. If you are working with a PEO that is not currently certified, you should ask when and if they plan on certifying. It would be worth knowing whether or not they plan on working with the IRS on their certification. You will have to make the decision as to whether or not working with a PEO certified by the IRS is worthwhile for your organization.  There are definitely benefits to the certification for business owners and human resource managers to consider. Let’s go over a few: For one, under the regulation by the IRS, certified PEOs must meet requirements for tax status and be able to successful complete a background check by the IRS before they can be certified. These are important points to mention because your PEO, no matter which one you choose, is taking on the responsibility of paying your employment taxes with the IRS. Their failure to pay means you are still responsible for paying them even if they take your money and fail to do so.  Secondly, one good reason to ask, “Should my PEO be certified by the IRS?,” is that under the regulations of certification by the IRS, all certified PEOs must have at least one office in the United States and be able to demonstrate proven knowledge in employment, tax, and human resources law in America. When it comes to avoiding litigation or being held responsible for non-compliance, you want to make sure your PEO has experience in working with American employers. The IRS certification will ensure that they do. With so many companies from overseas offering online professional services to American businesses, and with the mixed reviews on working with International companies for professional services, this is just another layer of protection for the American employer. 

Where Do I Go To Know A PEO Is Certified By The IRS?

Coming soon to the IRS page for PEO certification will be a list for PEOS certified under the program and a list of PEOs that have had their certification suspended or revoked. For now, you’ll have to rely on the knowledge expertise of a trusted professional firm like PEO Spectrum. PEO Spectrum is in the business of letting business owners know which of hundreds of PEOs are the right choice for business owners and human resources managers all over the country; at no cost to them. If you are interested in working with a PEO to save money on your health benefits, but don’t know where to start in researching the right ones, look no further than PEO Spectrum.