PDF document

- 1 -

Userid: CPM Schema: Leadpct: 99% Pt. size: 9.5 Draft Ok to Print
instrx
AH XSL/XML Fileid: … ns/I8973/201812/A/XML/Cycle06/source (Init. & Date) _______

Page 1 of 4 11:30 - 27-Nov-2018

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Department of the Treasury
Internal Revenue Service
Instructions for Form 8973

(Rev. December 2018)
Certified Professional Employer Organization/Customer Reporting Agreement

Section references are to the Internal Revenue Code unless own Form 8973 to notify the IRS that its service contract with
otherwise noted. the CPEO has ended.
Future Developments When To File
For the latest information about developments related to Generally, a CPEO must file Form 8973 within 30 days of
Form 8973 and its instructions, such as legislation enacted starting or ending a service contract with a customer.
after they were published, go to IRS.gov/Form8973. However, a newly certified CPEO has 6 months from the date
of its notice of certification to submit Forms 8973 with respect
to the commencement of any service contracts with existing
General Instructions customers (see section 2.06(1) of Rev. Proc. 2017-14,
2017-3 I.R.B. 426, available at IRS.gov/irb/
Purpose of Form 8973 2017-03_IRB#RP-2017-14 ).
Certified Professional Employer Organizations (CPEOs) use In addition, before the end of the last year or period listed
Form 8973 to notify the IRS that a service contract between a on the most recent prior CPEO Consent to Disclosure of Tax
CPEO and a customer has started or ended, and to correct a Information, the CPEO must renew the consent if it is still
previously filed Form 8973. If Form 8973 is being used to under a service contract with the customer named on the
notify the IRS that a service contract has started, CPEOs also consent. For more information on renewing the consent, see
use Form 8973 to identify the forms that the CPEO will file Renewing the CPEO Consent to Disclosure of Tax
reporting wages or compensation paid to employees Information, later.
performing services for the customer and to allow the CPEO
to consent to the disclosure of tax information to the Where To File
customer.
Mail to the following address.
For purposes of this form, a service contract is either a
Department of the Treasury
CPEO contract described under section 7705(e)(2) or a
Internal Revenue Service
service agreement described under Regulations section
Ogden, UT 84201-0089
31.3504-2(b)(2), and a customer is any person who has
entered into such a service contract with the CPEO. For more
information on CPEO contracts and service agreements, see Completing and Filing Form 8973
the line 10 instructions, later. Make entries on Form 8973 as follows to enable accurate
scanning and processing.
For more information about the CPEO program, including
frequently asked questions, go to IRS.gov/CPEO. • Use 12-point Courier font (if possible) for all entries if
you're typing or using a computer to complete your form.
If the customer filed Form 2678, Employer/Payer Portable Document Format (PDF) forms on IRS.gov have
TIP Appointment of Agent, appointing the CPEO as an fillable fields with acceptable font specifications.
authorized agent of the customer under Regulations • In Part 1, enter the date as “MM/DD/YYYY.” For example,
section 31.3504-1, then the relationship between the CPEO if a service contract started on January 1, 2019, enter
and the customer isn’t subject to a CPEO contract or a “01/01/2019.”
service agreement under Regulations section 31.3504-2(b)
(2). In this case, the CPEO shouldn’t file Form 8973 for the
customer. Specific Instructions

Substitute Forms Part 1: Why Are You Filing This Form?
The IRS accepts quality substitute tax forms that are Check a box to tell the IRS if you’re filing Form 8973 because
consistent with the official forms and have no adverse impact a service contract started between the customer reported in
on our processing. The official Form 8973 is the standard for Part 2 and the CPEO reported in Part 3, a service contract
substitute forms. Because a substitute form is a variation ended between the customer reported in Part 2 and the
from the official form, you should know the requirements of CPEO reported in Part 3, or you're correcting a previously
the official form for the year of use before you create a filed Form 8973. You must enter the date (formatted as
substitute version. For details on the requirements for MM/DD/YYYY) that the service contract started or ended.
substitute forms, see Pub. 1167. Service contract started. In Part 1, the service contract
date is the date the CPEO and customer entered into either a
Who Must File CPEO contract described under section 7705(e)(2) or a
The CPEO must file Form 8973 to notify the IRS that a service agreement described under Regulation section
service contract started between a customer reported in Part 31.3504-2(b)(2). If line 10 in Part 4 is checked “Yes” (that is,
2 and a CPEO reported in Part 3 or to correct a previously the CPEO and customer are subject to a CPEO contract),
filed Form 8973. The CPEO is required to file Form 8973 to then the service contract start date entered in Part 1 must be
notify the IRS that a service contract has ended. In addition, the date the CPEO and customer entered into the CPEO
though not required, the customer may also separately file its contract, even if the CPEO and customer had an existing

Nov 27, 2018 Cat. No. 68908X

- 2 -

Page 2 of 4 Fileid: … ns/I8973/201812/A/XML/Cycle06/source 11:30 - 27-Nov-2018

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

contractual relationship prior to the CPEO’s certification. The customer may also apply for an EIN by faxing or mailing
service contract start date of a CPEO contract under section Form SS-4 to the IRS. If the principal business was created
7705(e)(2) can’t precede the CPEO's certification effective or organized outside of the United States or U.S. territories,
date. the customer may also apply for an EIN by calling
When reporting that a service contract has started, either 267-941-1099 (toll call).
the customer or the CPEO can complete Parts 1 and 2. The Don’t use a social security number (SSN) in place of
CPEO must complete Parts 3 and 4 and provide the ! an EIN.
customer a copy of these instructions before the customer CAUTION
signs Part 5. The CPEO must also complete Part 6 and the
CPEO Consent to Disclosure of Tax Information before Line 2. Customer’s Name
sending Form 8973 to the IRS. The CPEO must provide the Enter the customer’s name (not the trade name). The name
customer with a copy of the fully completed and signed Form on line 2 should be the same as the legal name the customer
8973. used when it applied for its EIN, unless the customer notified
Service contract ended. The CPEO is required to file Form the IRS of a name change.
8973 to notify the IRS that a service contract has ended. Only
the CPEO’s signature is required to notify the IRS that a Line 3. Customer’s Trade Name
service contract has ended. In addition, though not required, Enter the customer’s trade name (if any). The trade name on
the customer may also separately file its own Form 8973 to line 3 should be the same as the trade name the customer
notify the IRS that its service contract with the CPEO has used when it applied for its EIN.
ended. If a customer separately files its own Form 8973 to
notify the IRS that its service contract with the CPEO has Line 4. Address
ended, only the customer’s signature is required on that Enter the customer’s address.
Form 8973. In both cases, Parts 1, 2, and 3 must be
completed (although Part 2, line 5, should be blank). It isn’t Line 5. Identify Forms That the CPEO Will File
necessary in either case to complete Part 4 or the CPEO Reporting Wages or Compensation Paid to
Consent to Disclosure of Tax Information.
Employees Performing Services for the
Correcting a previously filed Form 8973. Submit Form Customer
8973 with the correct information in accordance with these
instructions. Check the boxes for all forms that the CPEO will file reporting
wages or compensation paid to employees performing
Before the end of the last year or period listed on the services for the customer. If the CPEO is reporting only some
TIP most recent prior CPEO Consent to Disclosure of Tax of the wages or compensation paid to employees performing
Information, the CPEO must renew the consent if it is services for the customer, check the boxes under CPEO
still under a service contract with the customer named on the reports some wages/compensation paid to employees.
consent. See Renewing the CPEO Consent to Disclosure of
Tax Information, later. For example, if the CPEO reports wages or compensation
paid by the CPEO to employees performing services for the
Transfer or assignment of a service contract. If a CPEO customer pursuant to a service contract and the customer
(the transferor) transfers or assigns a service contract that separately reports wages or compensation (including, for
was previously reported as “started” on Form 8973 to a example, bonuses, stock options, and taxable fringe
subsidiary or affiliate (the transferee), the transferor must file benefits) paid by the customer to the same employees, the
a Form 8973 to tell the IRS that the service contract has CPEO is reporting some, but not all, of the wages or
ended between the customer reported in Part 2 and the compensation paid to employees performing services for the
CPEO reported in Part 3. Then, if the transferee is a CPEO, customer and should check the boxes under CPEO reports
within 30 days of the transfer, the transferee must file Form some wages/compensation paid to employees.
8973 to tell the IRS that a service contract has started Similarly, if a CPEO and a customer enter into a service
between the customer reported in Part 2 and the CPEO contract that covers some, but not all, of the employees
(transferee) reported in Part 3. performing services for the customer, so that the customer
reports wages or compensation paid to the employees not
Part 2: Customer Information covered by the service contract, the CPEO is reporting some,
but not all, of the wages or compensation paid to employees
Line 1. Customer’s Employer Identification performing services for the customer and should check the
Number (EIN) boxes under CPEO reports some wages/compensation paid
Enter the customer’s EIN. The EIN that you enter on line 1 to employees.
must match the EIN that the IRS assigned to the customer. If For details on wages and compensation, see Pub. 15-A,
the customer previously filed employment tax returns (for Employer’s Supplemental Tax Guide, and the General
example, Form 941, Employer’s QUARTERLY Federal Tax Instructions for Forms W-2 and W-3.
Return), the EIN on line 1 also must match the EIN that the
customer used on its employment tax returns. The Part 3: CPEO Information
customer’s business should have only one EIN. If the
customer has more than one EIN and isn’t sure which one to Line 6. CPEO’s EIN
use, the customer can write to the IRS office where it files its
employment tax returns (use the Without a payment address Enter the CPEO’s EIN. The EIN that you enter on line 6 must
in the instructions for the employment tax returns) or call the be the same as the EIN that you’ll use when you file
IRS at 800-829-4933. If the customer doesn’t have an EIN, it employment tax returns (for example, Form 941 and its
may apply for one online by visiting IRS.gov/EIN. The related Schedule R (Form 941), Allocation Schedule for
Aggregate Form 941 Filers).

-2- Instructions for Form 8973 (Rev. 12-2018)

- 3 -

Page 3 of 4         Fileid: … ns/I8973/201812/A/XML/Cycle06/source                             11:30 - 27-Nov-2018

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 7. CPEO’s Name                                                 • Pays wages or RRTA compensation to the individual(s) 
Enter the CPEO’s name (not the trade name). The name that           performing services for the customer pursuant to the 
you enter on line 7 must be the same as the name that you’ll        agreement; and
use when you file employment tax returns (for example, Form         • Assumes responsibility to collect, report, and pay, or 
941 and its related Schedule R (Form 941)).                         assumes liability for, employment taxes on the wages or 
                                                                    RRTA compensation paid by the CPEO to the individual(s) 
Line 8. CPEO’s Trade Name                                           performing services for the customer pursuant to the 
                                                                    agreement.
Enter the CPEO’s trade name (if any). The name that you 
enter on line 8 must be the same as the trade name that             Line 11. Is the Customer Reported in Part 2 a 
you’ll use when you file employment tax returns (for example, 
Form 941).                                                          Provider of Employment-Related Services?
                                                                    The customer is a provider of employment-related services if 
Line 9. Address                                                     it provides:
Enter the physical address that the CPEO provided on its            • Employment tax administration,
application for certification as a CPEO (if this address has        • Payroll services, or
changed and the CPEO has provided an updated address to             • Other employment-related compliance services to clients.
the IRS, enter the updated address). The address must be              Other employment-related compliance services may 
an address in the United States.                                    include, but aren’t limited to, collecting, reporting, and paying 
                                                                    employment taxes for wages or compensation paid to 
Part 4: Customer Relationship                                       individuals performing services for the clients.
Information
                                                                    Line 12. Is the Customer Reported in Part 2 a 
Answer “Yes” or “No” to the questions on lines 10–13. 
However, if you answer “No” to question 10, you may skip            Related Party of the CPEO?
lines 11–13.                                                        A CPEO won’t be treated as the employer of an individual 
                                                                    performing services for the customer for purposes of federal 
Line 10. Is the CPEO’s Relationship With the                        employment taxes if the customer is a related party, even if 
Customer Reported in Part 2 Subject to a                            the CPEO’s relationship with the customer is subject to a 
Contract Described Under Section 7705(e)(2)?                        CPEO contract. The customer is a related party if it has a 
                                                                    relationship with the CPEO as described in section 267(b) or 
The CPEO’s relationship with the customer is subject to a           section 707(b), but substituting “10 percent” for any reference 
contract described under section 7705(e)(2) (also called a          to “50 percent.”
CPEO contract) if the contract is in writing and, with respect 
to an individual providing services for the customer pursuant       Line 13. Does the CPEO Apply the Exemptions, 
to the contract, provides that the CPEO will assume 
                                                                    Exclusions, Definitions, and Other Rules Which 
responsibility for:
• Payment of wages or Railroad Retirement Tax Act (RRTA)            Are Based on Type of Employer Under Sections 
compensation to the individual(s) performing services for the       3511(a)(2) and 3511(c)(2) to the Customer 
customer, without regard to the receipt or adequacy of              Reported in Part 2?
payment from the customer;                                          For purposes of federal employment taxes, the exemptions, 
• Reporting, withholding, and paying any applicable federal         exclusions, definitions, and other rules that are based on type 
employment taxes on the wages or RRTA compensation                  of employer under sections 3511(a)(2) and 3511(c)(2) are 
paid to the individual(s) performing services for the customer,     presumed to be based on the customer and, in most cases, 
without regard to the receipt or adequacy of payment from           “Yes” will be checked for this line. However, check the “No” 
the customer;                                                       box in the rare case that another entity is the common law 
• Providing employee benefits that the contract may require         employer of individuals performing services for the customer, 
the CPEO to provide, without regard to the receipt or               and the exemptions, exclusions, definitions, and other rules 
adequacy of payment from the customer; and                          that are based on type of employer will be based on that 
• Recruiting, hiring, and firing individuals performing             entity.
services for the customer (in addition to the customer’s 
responsibility for recruiting, hiring, and firing).                 Part 5: Customer Signature
  Additionally, the CPEO must agree in the contract to              Part 5 must be signed by a person who has the authority to 
maintain employee records for the individual(s) performing          execute Form 8973 for the customer listed in Part 2. By 
services for the customer and to be treated as a CPEO for           signing Part 5, you acknowledge that Form 8973, Parts 1, 2, 
federal employment tax purposes in relation to the                  and 4 are, to the best of your knowledge and belief, true, 
individual(s) performing services for the customer.                 correct, and complete.
                                                                           Customers can visit IRS.gov/CPEO for more 
  If the CPEO’s relationship with the customer isn’t subject        TIP    information about the CPEO program and to access 
to a CPEO contract (“No” is checked on line 10), Form 8973                 the list of organizations (updated quarterly) that are 
must still be filed if the CPEO’s relationship with the customer    certified by the IRS as CPEOs.
reported in Part 2 is subject to a service agreement 
described under Regulations section 31.3504-2(b)(2). A 
service agreement under Regulations section 31.3504-2(b)            Part 6: CPEO Signature
(2) means an agreement that provides that the CPEO:                 Part 6 must be signed by a person who has the authority to 
• Asserts it is the employer (or “co-employer”) for the             execute Form 8973 for the CPEO listed in Part 3. By signing 
individual(s) performing services for the customer pursuant to      Part 6, you acknowledge, under penalties of perjury, that 
the agreement;

Instructions for Form 8973 (Rev. 12-2018)                        -3-

- 4 -

Page 4 of 4 Fileid: … ns/I8973/201812/A/XML/Cycle06/source 11:30 - 27-Nov-2018

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Form 8973, Parts 1–4 are, to the best of your knowledge and only need to send the renewed consent (page 3 of Form
belief, true, correct, and complete. 8973). Don’t send a completed Form 8973. Mail the renewed
consent to the address provided under Where To File,
Only the CPEO’s signature is required if you're telling
earlier.
TIP the IRS that a service contract has ended.
You must enter the customer’s name and customer’s
EIN that were included in Part 2 of the original or
CPEO Consent to Disclosure of Tax CAUTION! corrected Form 8973 that was filed to report the start
of the service contract.
Information
When filing Form 8973 to report the start of a service
contract, the CPEO must complete the CPEO Consent to Privacy Act and Paperwork Reduction Act Notice. We
Disclosure of Tax Information. ask for the information on Form 8973 to carry out the Internal
Revenue laws of the United States. Our authority to request
By signing, dating, and entering the CPEO’s EIN at the the information is Internal Revenue Code sections 3511 and
bottom of the consent, you allow the IRS, to the extent 7705 and the regulations thereunder. We use this information
necessary to carry out the purposes of the CPEO program, to to record the start or end of a service contract between a
disclose information to the customer named on the consent CPEO and the customer. A customer isn’t required to enter
from the CPEO’s employment tax returns (for example, into a service agreement with a CPEO. However, if a
Forms 940 and 941) as it relates to the customer named on customer chooses to enter into a service contract with a
the consent. This consent also covers the disclosure of any CPEO, both the customer and the CPEO are required to
information regarding the CPEO’s obligations to report, provide the information requested. Section 6109 requires the
deposit, and pay federal employment taxes for the customer customer and the CPEO to provide their identification
named on the consent. You also consent to the disclosure of numbers. If the customer or CPEO fails to provide the
information regarding the CPEO’s certification, regardless of information in a timely manner, or provides false or fraudulent
year. You must enter the following information on the information, the customer and the CPEO may be subject to
consent. penalties. Additionally, if the CPEO fails to provide this
information in a timely manner, or provides false or fraudulent
Customer’s name. Enter the customer’s name as shown in information, the IRS may revoke or suspend its certification.
Part 2.
Customer’s EIN. Enter the customer’s EIN as shown in Part Neither the CPEO nor the customer is required to provide
2. the information requested on a form that is subject to the
Paperwork Reduction Act unless the form displays a valid
Tax form number. Enter the tax form the CPEO files that OMB control number. Books or records relating to a form or
will include information related to the customer named on the its instructions must be retained as long as their contents
consent. Enter only one tax form on each line. may become material in the administration of any Internal
Don’t use a general reference such as “All tax forms” Revenue law.
! in place of the actual tax form number. Generally, tax returns and return information are
CAUTION
confidential, as required by section 6103. However, section
Year(s) or period(s). Enter the year(s) or period(s) for 6103 allows or requires us to disclose this information to
which you consent to the disclosure of tax information. You others as described in the Code. We may disclose your tax
may not list more than 3 years or 12 quarters. However, we information to the Department of Justice for civil and criminal
recommend that you list exactly 3 years or 12 quarters litigation, and to cities, states, the District of Columbia, and
because you must renew the consent, if you’re still under a U.S. commonwealths and possessions to administer their tax
service contract with the customer named on the consent, laws. We may also disclose this information to other
when the last year or period listed on the consent ends. countries under a tax treaty, to federal and state agencies to
Example. You may list “2019–2021” or “2019, 2020, enforce federal nontax criminal laws, or to federal law
2021” for returns filed annually. For returns filed quarterly, enforcement and intelligence agencies to combat terrorism.
you may list “2nd Qtr. 2019–1st Qtr. 2022,” or you can list the
years (as shown earlier) if those years include all four The time needed to complete and file Form 8973 will vary
quarters. depending on individual circumstances. The estimated
average time is:
Don’t use a general reference such as “All years” or
! “All periods” in place of the actual year(s) or Recordkeeping 15 min.
CAUTION period(s).
Learning about the law or the form 1 hr.
Preparing and sending the form to the IRS 15 min.
Signature. Sign and date the bottom of the consent. You
also must enter the CPEO’s EIN and name, and print your
name and title.
If you have comments concerning the accuracy of these
Renewing the CPEO Consent to Disclosure of time estimates or suggestions for making Form 8973 simpler,
Tax Information we would be happy to hear from you. You can send us
If you’re still under a service contract with the customer comments from IRS.gov/FormComments. Or you can write to
named on the consent before the end of the last year or the Internal Revenue Service, Tax Forms and Publications
period listed on the most recent prior consent, you must Division, 1111 Constitution Ave. NW, IR-6526, Washington,
renew the consent by sending a new consent to the IRS. The DC 20224. Don't send Form 8973 to this address. Instead,
renewed consent can cover an additional 3 years or 12 see Where To File, earlier.
quarters. For details, see Year(s) or period(s) above. You

-4- Instructions for Form 8973 (Rev. 12-2018)

PDF file checksum: 1502378685

(Plugin #1/8.13/12.0)