Who’s responsible for taxes in this tricky situation? The IRS just clarified who’s responsible for filing and issuing Forms W-2 when both an employer and an authorized agent pay workers during the same calendar year. Per a recent memo, the agency said both entities must file the forms for the portion of the year they issued wages. What agent must do For example, if an employer pays wages to employees directly for the first three quarters of the year, then files Form 2678 (Employer/Payer Appointment of Agent) to designate a third-party representative to issue wages for the last quarter, the employer only has to file Forms W-2 for those three quarters. The agent is responsible for the last quarter. Remember: Third-party agents (authorized under Sec. 3504 of the Internal Revenue Code) and payroll service providers differ. While both can file certain returns and pay taxes on behalf of employers, payroll service providers don’t assume employment tax liability when doing so, while third-party agents do. More info: bit.ly/agent582