Who's the Employer?

Answer: I think there were some very important clarifications of the IRS' position. Of course, as with any conference, one must recognize that colloquy at a podium is not a Revenue Ruling. But I believe the informal comments do provide a helpful indication of the direction the IRS is heading.

On my employerbook.com web site I have posted 3 files from the conference:

Notwithstanding that, Mr. Wickersham seems to be working from a more limited definition of PEO than mine. Although he refused to define specifically a PEO, he did describe it as a business that primarily takes over all or virtually all the employees of a recipient-- in effect, to be the recipient's outsourced HR department. I know of several staffing firms who will be relieved to hear about that more limited definition.

Mr. Wickersham confirmed my impression that firms only leasing true temporary employees (e.g., a fill-in for the vacationing receptionist) are not PEOs. He did not comment about how to handle a staffing firm that handles both long-term and temporary workers.

Mr. Wickersham emphasized that the Service is looking for substantial compliance with the revenue procedure. Failure to dot every "i" and cross every "t" will not cause doom and disaster, because the IRS does not have the manpower resources to inflict doom and disaster except in the most abusive situations. (Perhaps they should consider using a staffing firm!)

Because we are now less than 3 months from the date that most PEOs will be making their decisions as to how to proceed under the revenue procedure, these are important clarifications. Of course, for a complete discussion of the revenue procedure, see chapter 4 of my book, Who's the Employer.

And, Mr. Wickersham, in case this column should cross your desk, if I have inadvertantly misstated any of your positions, either here or on my web site, please accept my apologies and let me know so I can set it right.

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