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Authorized Reporting Agent

In the context of payroll, an authorized reporting agent is a third party who can make Federal payroll tax deposits, file Federal payroll tax information, and generally handle matters related to Federal payroll taxes with the IRS on behalf of a business. IRS Form 8865 is used to designate an authorized agent.

Tasks Performed by Reporting Agent

Authorized agents can:

  • Sign and file certain returns;
  • Make deposits and payments for certain returns;
  • Receive duplicate copies of tax information, notices, and other written and/ or electronic communication regarding any authority granted; and
  • Provide IRS with information to aid in penalty relief determinations related to the authority granted on Form 8655.

Limits on Reporting Agent's Authority

Form 8865 explicitly states the limits of the agent's authorization by specifying:

  • which forms the agent can file on behalf of the business.
  • which payments the agent can deposit on behalf of the business.
  • whether the agent can receive copies of notifications sent by the IRS to the business.
  • whether the agent also has authority to sign and file certain state tax returns.

If authority is granted to an agent:

  • The authority begins on the date specified on the Form, and continues until revoked by either the business or the agent. In other words, if a company switches from one payroll provider to another, the previous provider must notified that their authorization has ended.
  • The business is still ultimately responsible for making sure that taxes are deposited and filed on time. Should the agent fail to report or deposit on time, the business may be liable for penalties.
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