[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 900 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 900

  To amend the Internal Revenue Code of 1986 to regulate payroll tax 
                deposit agents, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 8, 2013

 Ms. Mikulski introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to regulate payroll tax 
                deposit agents, 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. SHORT TITLE.

    This Act may be cited as the ``Small Business Payroll Protection 
Act of 2013''.

SEC. 2. REGULATION OF PAYROLL TAX DEPOSIT AGENTS.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7529. PAYROLL TAX DEPOSIT AGENTS.

    ``(a) Registration.--
            ``(1) In general.--The Secretary shall establish a system 
        to require the initial registration and the annual renewal of 
        the registration of persons seeking to act as payroll tax 
        deposit agents authorized to make Federal employment tax 
        deposits on behalf of employer taxpayers. Such system shall 
        also--
                    ``(A) establish a registration and renewal fee for 
                each payroll tax deposit agent in an amount not to 
                exceed $100,
                    ``(B) provide the payroll tax deposit agent the 
                option of either submitting a bond as specified in 
                subsection (b) or submitting to a quarterly 
                certification as specified in subsection (c),
                    ``(C) require such disclosures as are specified in 
                subsection (d), and
                    ``(D) provide penalties for unregistered persons 
                acting as payroll tax deposit agents with respect to 
                Federal tax deposits and for payroll tax deposit agents 
                who fail to furnish such disclosures as are specified 
                in subsection (d), in an amount not to exceed $10,000 
                for each 90 days of noncompliance.
            ``(2) Definition of payroll tax deposit agent.--For 
        purposes of this section, the term `payroll tax deposit agent' 
        means any person which provides payroll processing or tax 
        filing and deposit services to 1 or more employers (other than 
        an employer acting on its own behalf) if such person has the 
        contractual authority to access such employer's funds for the 
        purpose of making employment tax deposits. Such term shall not 
        include any person which only transfers such funds to the 
        appropriate government authority (regardless if such person has 
        the authority to determine the amount of such transfer) and 
        does not otherwise have the authority to access such funds.
            ``(3) Employment tax.--For purposes of this section, the 
        term `employment tax' includes unemployment insurance 
        contributions.
    ``(b) Bonding.--
            ``(1) In general.--If a payroll tax deposit agent elects to 
        submit a bond under subsection (a)(1)(B), the amount of such 
        bond shall be not less than $50,000 nor more than $500,000, and 
        shall be determined with respect to each payroll tax deposit 
        agent under regulations prescribed by the Secretary.
            ``(2) Surety.--Any bond or security furnished pursuant to 
        this section shall be in such form and with such surety or 
        sureties as may be prescribed by regulations issued pursuant to 
        section 7101.
            ``(3) Evidence of bond.--Evidence of such bond shall be 
        filed with the Secretary with the initial registration and each 
        annual renewal of the registration of persons licensed to act 
        as payroll tax deposit agents.
    ``(c) Quarterly Certifications.--If a payroll tax deposit agent 
elects to submit to a quarterly certification under subsection 
(a)(1)(B), such certification shall be performed by an independent 
third party who is qualified to perform such certifications under 
targeted criteria established by the Secretary, at the direction of the 
Secretary, and shall be based on the following narrowly targeted 
principles--
            ``(1) that the escrow account of the payroll tax deposit 
        agent in which such agent holds its employers' taxes is 
        balanced to the total of quarterly reconciliation statements 
        (i.e., Internal Revenue Service Forms 941 and State 
        equivalents), and any liabilities collected but not yet 
        deposited with the respective government authority,
            ``(2) that the escrow account funds of the payroll tax 
        deposit agent are not commingled with such agent's operating 
        funds,
            ``(3) that there is no evidence that the payroll tax 
        deposit agent used any of the funds in such agent's escrow 
        account to pay such agent's operating costs, and
            ``(4) that there is adequate receipt evidence that such 
        agent paid the required employment taxes on behalf of the 
        employers to the proper government employment tax authority.
A copy of each completed quarterly certification report shall be filed 
quarterly with the Secretary and no payroll tax deposit agent shall 
obtain its annual renewal of the registration of persons licensed to 
act as payroll tax deposit agents unless all such copies have been 
filed.
    ``(d) Disclosure.--The Secretary shall require payroll tax deposit 
agents to disclose to each client prior to or at the time of 
contracting for payroll services, and to each existing client at least 
quarterly--
            ``(1) the client's continuing liability for payment of all 
        Federal and State employment taxes notwithstanding any 
        contractual relationship with a payroll tax deposit agent,
            ``(2) the mechanisms available to the client to verify the 
        amount and date of payment of all tax deposits made by the 
        payroll tax deposit agent on behalf of such client, including 
        the Internet address and telephone number of each Federal and 
        State employment tax authority related to such deposits, and
            ``(3) such other information that the Secretary determines 
        is necessary or appropriate to assist employers in the 
        selection and use of payroll tax deposit agents.
    ``(e) Tax Deposits and Returns.--Only persons registered under this 
section may--
            ``(1) make Federal tax deposits on behalf of an employer,
            ``(2) sign and file Federal employment tax returns on 
        behalf of a taxpayer, and
            ``(3) have access to confidential tax information relating 
        to such employer.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section.''.
    (b) Quarterly Certification Criteria.--In establishing the criteria 
for the quarterly certification required under section 7529(c) of the 
Internal Revenue Code of 1986, as added by subsection (a), the 
Secretary of the Treasury shall ensure, to the extent practicable, that 
the burden of the certification process on the payroll tax deposit 
agent is minimized.
    (c) Payroll Tax Deposit Agents Subject to Penalty for Failure To 
Collect and Pay Over Tax, or Attempt To Evade or Defeat Tax.--
            (1) In general.--Section 6672(a) of the Internal Revenue 
        Code of 1986 is amended by inserting ``, including any payroll 
        tax deposit agent (as defined in section 7529(a)(2)) who has 
        assumed the obligation to pay over any tax by contract with a 
        taxpayer (but only to the extent that such payroll tax deposit 
        agent has received irrevocable payment of funds for the 
        corresponding tax liabilities from such taxpayer),'' after 
        ``imposed by this title''.
            (2) Penalty not subject to discharge in bankruptcy.--
        Section 6672(a) is further amended by adding at the end the 
        following new sentence: ``Notwithstanding any other provision 
        of law, no penalty imposed under this section may be discharged 
        in bankruptcy.''.
            (3) Conforming amendment.--Section 6672(b)(1) of the 
        Internal Revenue Code of 1986 is amended by striking the word 
        ``taxpayer'' and inserting the word ``person'' each time it 
        appears.
            (4) Construction.--The amendment made by paragraph (1) 
        shall not be construed to create any inference with respect to 
        the interpretation of section 6672 of the Internal Revenue Code 
        of 1986 as such section was in effect on the day before the 
        date of the enactment of this Act.
    (d) Clerical Amendment.--The table of sections for such chapter 77 
is amended by adding at the end the following new item:

``Sec. 7529. Payroll tax deposit agents.''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Penalty.--The amendments made by subsection (c) shall 
        apply to failures occurring after the date of the enactment of 
        this Act.

SEC. 3. VERIFICATION OF ADDRESS CHANGE.

    (a) In General.--Chapter 25 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 3511. VERIFICATION OF ADDRESS CHANGE.

    ``The Secretary shall issue a notice of confirmation of any address 
change relating to an employer making tax payments under this subtitle, 
and such notice shall be sent to both the employer's former and new 
address.''.
    (b) Clerical Amendment.--The table of sections for such chapter 25 
is amended by adding at the end the following new item:

``Sec. 3511. Verification of address change.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 180 days after the date of the enactment of 
this Act.

SEC. 4. OFFER-IN-COMPROMISE REQUESTS BY VICTIMS OF FRAUD.

    Section 7122(d)(3) of the Internal Revenue Code of 1986 is 
amended--
            (1) in subparagraph (B)(ii), by striking ``and'' at the 
        end,
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``, and'', and
            (3) by adding at the end the following new subparagraph:
                    ``(D) an officer of employee of the Internal 
                Revenue Service shall give special consideration to an 
                offer-in-compromise from a taxpayer who has been the 
                victim of fraud.''.
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