H.R. 3223

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3223 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 3223

To amend the Internal Revenue Code of 1986 to establish procedures 
relating to the attribution of errors in the case of third party payors 
of payroll taxes, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

May 6, 2025

Mr. Thompson of California (for himself and Ms. Van Duyne) introduced 
the following bill; which was referred to the Committee on Ways and 
Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to establish procedures 
relating to the attribution of errors in the case of third party payors 
of payroll taxes, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. ATTRIBUTION OF ERRORS IN THE CASE OF THIRD PARTY PAYORS OF 
PAYROLL TAXES.

(a) In General.--The Internal Revenue Code of 1986 is amended by 
adding a new section 3513 to read as follows:

``SEC. 3513. THIRD PARTY PAYORS OF PAYROLL TAXES.

``(a) Certification.--A third party payor may, in the course of 
carrying out any requirement imposed under this subtitle, rely on a 
certification by the applicable employer unless such third party payor 
has constructive knowledge of an error in such certification. For 
purposes of this section, the term `certification' includes a 
representation, attestation, or similar document.
``(b) Liability for Error.--For the purpose of imposing any 
liability with respect to an act carried out by a third party payor--
``(1) in the case of a third party payor with constructive 
knowledge of an error--
``(A) the employer shall be responsible for such 
liability; and
``(B) the third party payor shall be responsible 
for such liability, but only with respect to so much of 
the liability as is attributable to a portion of the 
certification with respect to which the third party 
payor had constructive knowledge of the error; or
``(2) in the case of a certification with respect to which 
the third party payor did not have constructive knowledge of an 
error, the employer shall have sole responsibility for any 
liability arising from such error.
``(c) Liability.--For purposes of subsection (b), the term 
`liability' means any amount due under this subtitle, and any interest 
or penalties due with respect to such amount under this title.
``(d) Effect of Error on Other Employers.--The Secretary may not 
delay the processing of any payroll tax credit claimed by a third party 
payor on behalf of an employer or initiate an audit or examination of 
such employer solely because such payroll tax credit was claimed by a 
third party payor that filed an erroneous return of tax in reliance on 
a certification of another employer.
``(e) Record Retention.--The Secretary may require a third party 
payor to provide any information in possession of such third party 
payor to the Secretary in relation to an employer that the Secretary 
could require such employer to provide to the Secretary.
``(f) Constructive Knowledge.--For purposes of this section, the 
term `constructive knowledge' means, with respect to a third party 
payor, that such third party payor knew or should have known of an 
error in a certification described in subsection (a). However, with 
respect to any payroll tax credit claimed by a third party payor on 
behalf of an employer, such third party payor will be deemed not to 
have constructive knowledge of an error in a certification with respect 
to such payroll tax credit if--
``(1) such certification provides that the employer is 
entitled to the payroll tax credit;
``(2) the third party payor accurately reported the payroll 
tax credit in accordance with information certified by the 
employer; and
``(3) prior to claiming the payroll tax credit, the third 
party payor verified the amount of aggregate wages paid by the 
third party payor used by the employer in establishing the 
amount of the payroll tax credit.
``(g) Third Party Payor.--For purposes of this section, the term 
`third party payor' includes a fiduciary, agent, or other person 
described in section 3504, a professional employer organization, or a 
certified professional employer organization.''.
(b) Effective Date.--This section shall apply to audits, 
examinations, and assessments initiated or made after the date of 
enactment.
<all>