Instructions for Form 8973

Instructions for Form 8973

Department of the Treasury

Internal Revenue Service

(Rev. December 2018)

Certified Professional Employer Organization/Customer Reporting Agreement

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Form 8973 and its instructions, such as legislation enacted

after they were published, go to IRS.gov/Form8973.

General Instructions

Purpose of Form 8973

Certified Professional Employer Organizations (CPEOs) use

Form 8973 to notify the IRS that a service contract between a

CPEO and a customer has started or ended, and to correct a

previously filed Form 8973. If Form 8973 is being used to

notify the IRS that a service contract has started, CPEOs also

use Form 8973 to identify the forms that the CPEO will file

reporting wages or compensation paid to employees

performing services for the customer and to allow the CPEO

to consent to the disclosure of tax information to the

customer.

For purposes of this form, a service contract is either a

CPEO contract described under section 7705(e)(2) or a

service agreement described under Regulations section

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

the line 10 instructions, later.

For more information about the CPEO program, including

frequently asked questions, go to IRS.gov/CPEO.

If the customer filed Form 2678, Employer/Payer

TIP Appointment of Agent, appointing the CPEO as an

own Form 8973 to notify the IRS that its service contract with

the CPEO has ended.

When To File

Generally, a CPEO must file Form 8973 within 30 days of

starting or ending a service contract with a customer.

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

customers (see section 2.06(1) of Rev. Proc. 2017-14,

2017-3 I.R.B. 426, available at IRS.gov/irb/

2017-03_IRB#RP-2017-14).

In addition, before the end of the last year or period listed

on the most recent prior CPEO Consent to Disclosure of Tax

Information, the CPEO must renew the consent if it is still

under a service contract with the customer named on the

consent. For more information on renewing the consent, see

Renewing the CPEO Consent to Disclosure of Tax

Information, later.

Where To File

Mail to the following address.

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0089

Completing and Filing Form 8973

Make entries on Form 8973 as follows to enable accurate

scanning and processing.

• Use 12-point Courier font (if possible) for all entries if

you're typing or using a computer to complete your form.

Portable Document Format (PDF) forms on IRS.gov have

fillable fields with acceptable font specifications.

• In Part 1, enter the date as “MM/DD/YYYY.” For example,

if a service contract started on January 1, 2019, enter

“01/01/2019.”

authorized agent of the customer under Regulations

section 31.3504-1, then the relationship between the CPEO

and the customer isn’t subject to a CPEO contract or a

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

consistent with the official forms and have no adverse impact

on our processing. The official Form 8973 is the standard for

substitute forms. Because a substitute form is a variation

from the official form, you should know the requirements of

the official form for the year of use before you create a

substitute version. For details on the requirements for

substitute forms, see Pub. 1167.

Who Must File

The CPEO must file Form 8973 to notify the IRS that a

service contract started between a customer reported in Part

2 and a CPEO reported in Part 3 or to correct a previously

filed Form 8973. The CPEO is required to file Form 8973 to

notify the IRS that a service contract has ended. In addition,

though not required, the customer may also separately file its

Nov 27, 2018

Check a box to tell the IRS if you’re filing Form 8973 because

a service contract started between the customer reported in

Part 2 and the CPEO reported in Part 3, a service contract

ended between the customer reported in Part 2 and the

CPEO reported in Part 3, or you're correcting a previously

filed Form 8973. You must enter the date (formatted as

MM/DD/YYYY) that the service contract started or ended.

Service contract started. In Part 1, the service contract

date is the date the CPEO and customer entered into either a

CPEO contract described under section 7705(e)(2) or a

service agreement described under Regulation section

31.3504-2(b)(2). If line 10 in Part 4 is checked “Yes” (that is,

the CPEO and customer are subject to a CPEO contract),

then the service contract start date entered in Part 1 must be

the date the CPEO and customer entered into the CPEO

contract, even if the CPEO and customer had an existing

Cat. No. 68908X

contractual relationship prior to the CPEO’s certification. The

service contract start date of a CPEO contract under section

7705(e)(2) can’t precede the CPEO's certification effective

date.

When reporting that a service contract has started, either

the customer or the CPEO can complete Parts 1 and 2. The

CPEO must complete Parts 3 and 4 and provide the

customer a copy of these instructions before the customer

signs Part 5. The CPEO must also complete Part 6 and the

CPEO Consent to Disclosure of Tax Information before

sending Form 8973 to the IRS. The CPEO must provide the

customer with a copy of the fully completed and signed Form

8973.

customer may also apply for an EIN by faxing or mailing

Form SS-4 to the IRS. If the principal business was created

or organized outside of the United States or U.S. territories,

the customer may also apply for an EIN by calling

267-941-1099 (toll call).

!

Don’t use a social security number (SSN) in place of

an EIN.

CAUTION

Line 2. Customer’s Name

Enter the customer’s name (not the trade name). The name

on line 2 should be the same as the legal name the customer

used when it applied for its EIN, unless the customer notified

the IRS of a name change.

Service contract ended. The CPEO is required to file Form

8973 to notify the IRS that a service contract has ended. Only

the CPEO’s signature is required to notify the IRS that a

service contract has ended. In addition, though not required,

the customer may also separately file its own Form 8973 to

notify the IRS that its service contract with the CPEO has

ended. If a customer separately files its own Form 8973 to

notify the IRS that its service contract with the CPEO has

ended, only the customer’s signature is required on that

Form 8973. In both cases, Parts 1, 2, and 3 must be

completed (although Part 2, line 5, should be blank). It isn’t

necessary in either case to complete Part 4 or the CPEO

Consent to Disclosure of Tax Information.

Line 3. Customer’s Trade Name

Enter the customer’s trade name (if any). The trade name on

line 3 should be the same as the trade name the customer

used when it applied for its EIN.

Line 4. Address

Enter the customer’s address.

Line 5. Identify Forms That the CPEO Will File

Reporting Wages or Compensation Paid to

Employees Performing Services for the

Customer

Correcting a previously filed Form 8973. Submit Form

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

services for the customer. If the CPEO is reporting only some

of the wages or compensation paid to employees performing

services for the customer, check the boxes under CPEO

reports some wages/compensation paid to employees.

Before the end of the last year or period listed on the

TIP most recent prior CPEO Consent to Disclosure of Tax

Information, the CPEO must renew the consent if it is

still under a service contract with the customer named on the

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

customer pursuant to a service contract and the customer

separately reports wages or compensation (including, for

example, bonuses, stock options, and taxable fringe

benefits) paid by the customer to the same employees, the

CPEO is reporting some, but not all, of the wages or

compensation paid to employees performing services for the

customer and should check the boxes under CPEO reports

some wages/compensation paid to employees.

Transfer or assignment of a service contract. If a CPEO

(the transferor) transfers or assigns a service contract that

was previously reported as “started” on Form 8973 to a

subsidiary or affiliate (the transferee), the transferor must file

a Form 8973 to tell the IRS that the service contract has

ended between the customer reported in Part 2 and the

CPEO reported in Part 3. Then, if the transferee is a CPEO,

within 30 days of the transfer, the transferee must file Form

8973 to tell the IRS that a service contract has started

between the customer reported in Part 2 and the CPEO

(transferee) reported in Part 3.

Similarly, if a CPEO and a customer enter into a service

contract that covers some, but not all, of the employees

performing services for the customer, so that the customer

reports wages or compensation paid to the employees not

covered by the service contract, the CPEO is reporting some,

but not all, of the wages or compensation paid to employees

performing services for the customer and should check the

boxes under CPEO reports some wages/compensation paid

to employees.

Part 2: Customer Information

Line 1. Customer’s Employer Identification

Number (EIN)

Enter the customer’s EIN. The EIN that you enter on line 1

must match the EIN that the IRS assigned to the customer. If

the customer previously filed employment tax returns (for

example, Form 941, Employer’s QUARTERLY Federal Tax

Return), the EIN on line 1 also must match the EIN that the

customer used on its employment tax returns. The

customer’s business should have only one EIN. If the

customer has more than one EIN and isn’t sure which one to

use, the customer can write to the IRS office where it files its

employment tax returns (use the Without a payment address

in the instructions for the employment tax returns) or call the

IRS at 800-829-4933. If the customer doesn’t have an EIN, it

may apply for one online by visiting IRS.gov/EIN. The

For details on wages and compensation, see Pub. 15-A,

Employer’s Supplemental Tax Guide, and the General

Instructions for Forms W-2 and W-3.

Part 3: CPEO Information

Line 6. CPEO’s EIN

Enter the CPEO’s EIN. The EIN that you enter on line 6 must

be the same as the EIN that you’ll use when you file

employment tax returns (for example, Form 941 and its

related Schedule R (Form 941), Allocation Schedule for

Aggregate Form 941 Filers).

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Instructions for Form 8973 (Rev. 12-2018)

• Pays wages or RRTA compensation to the individual(s)

performing services for the customer pursuant to the

agreement; and

• Assumes responsibility to collect, report, and pay, or

assumes liability for, employment taxes on the wages or

RRTA compensation paid by the CPEO to the individual(s)

performing services for the customer pursuant to the

agreement.

Line 7. CPEO’s Name

Enter the CPEO’s name (not the trade name). The name that

you enter on line 7 must be the same as the name that you’ll

use when you file employment tax returns (for example, Form

941 and its related Schedule R (Form 941)).

Line 8. CPEO’s Trade Name

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

you’ll use when you file employment tax returns (for example,

Form 941).

Line 11. Is the Customer Reported in Part 2 a

Provider of Employment-Related Services?

The customer is a provider of employment-related services if

it provides:

• Employment tax administration,

• Payroll services, or

• Other employment-related compliance services to clients.

Line 9. Address

Enter the physical address that the CPEO provided on its

application for certification as a CPEO (if this address has

changed and the CPEO has provided an updated address to

the IRS, enter the updated address). The address must be

an address in the United States.

Other employment-related compliance services may

include, but aren’t limited to, collecting, reporting, and paying

employment taxes for wages or compensation paid to

individuals performing services for the clients.

Part 4: Customer Relationship

Information

Line 12. Is the Customer Reported in Part 2 a

Related Party of the CPEO?

Answer “Yes” or “No” to the questions on lines 10–13.

However, if you answer “No” to question 10, you may skip

lines 11–13.

A CPEO won’t be treated as the employer of an individual

performing services for the customer for purposes of federal

employment taxes if the customer is a related party, even if

the CPEO’s relationship with the customer is subject to a

CPEO contract. The customer is a related party if it has a

relationship with the CPEO as described in section 267(b) or

section 707(b), but substituting “10 percent” for any reference

to “50 percent.”

Line 10. Is the CPEO’s Relationship With the

Customer Reported in Part 2 Subject to a

Contract Described Under Section 7705(e)(2)?

The CPEO’s relationship with the customer is subject to a

contract described under section 7705(e)(2) (also called a

CPEO contract) if the contract is in writing and, with respect

to an individual providing services for the customer pursuant

to the contract, provides that the CPEO will assume

responsibility for:

• Payment of wages or Railroad Retirement Tax Act (RRTA)

compensation to the individual(s) performing services for the

customer, without regard to the receipt or adequacy of

payment from the customer;

• Reporting, withholding, and paying any applicable federal

employment taxes on the wages or RRTA compensation

paid to the individual(s) performing services for the customer,

without regard to the receipt or adequacy of payment from

the customer;

• Providing employee benefits that the contract may require

the CPEO to provide, without regard to the receipt or

adequacy of payment from the customer; and

• Recruiting, hiring, and firing individuals performing

services for the customer (in addition to the customer’s

responsibility for recruiting, hiring, and firing).

Line 13. Does the CPEO Apply the Exemptions,

Exclusions, Definitions, and Other Rules Which

Are Based on Type of Employer Under Sections

3511(a)(2) and 3511(c)(2) to the Customer

Reported in Part 2?

For purposes of federal employment taxes, the exemptions,

exclusions, definitions, and other rules that are based on type

of employer under sections 3511(a)(2) and 3511(c)(2) are

presumed to be based on the customer and, in most cases,

“Yes” will be checked for this line. However, check the “No”

box in the rare case that another entity is the common law

employer of individuals performing services for the customer,

and the exemptions, exclusions, definitions, and other rules

that are based on type of employer will be based on that

entity.

Part 5: Customer Signature

Additionally, the CPEO must agree in the contract to

maintain employee records for the individual(s) performing

services for the customer and to be treated as a CPEO for

federal employment tax purposes in relation to the

individual(s) performing services for the customer.

Part 5 must be signed by a person who has the authority to

execute Form 8973 for the customer listed in Part 2. By

signing Part 5, you acknowledge that Form 8973, Parts 1, 2,

and 4 are, to the best of your knowledge and belief, true,

correct, and complete.

If the CPEO’s relationship with the customer isn’t subject

to a CPEO contract (“No” is checked on line 10), Form 8973

must still be filed if the CPEO’s relationship with the customer

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)

(2) means an agreement that provides that the CPEO:

• Asserts it is the employer (or “co-employer”) for the

individual(s) performing services for the customer pursuant to

the agreement;

TIP information about the CPEO program and to access

Instructions for Form 8973 (Rev. 12-2018)

Customers can visit IRS.gov/CPEO for more

the list of organizations (updated quarterly) that are

certified by the IRS as CPEOs.

Part 6: CPEO Signature

Part 6 must be signed by a person who has the authority to

execute Form 8973 for the CPEO listed in Part 3. By signing

Part 6, you acknowledge, under penalties of perjury, that

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Form 8973, Parts 1–4 are, to the best of your knowledge and

belief, true, correct, and complete.

only need to send the renewed consent (page 3 of Form

8973). Don’t send a completed Form 8973. Mail the renewed

consent to the address provided under Where To File,

earlier.

Only the CPEO’s signature is required if you're telling

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

CAUTION corrected Form 8973 that was filed to report the start

of the service contract.

!

CPEO Consent to Disclosure of Tax

Information

When filing Form 8973 to report the start of a service

contract, the CPEO must complete the CPEO Consent to

Disclosure of Tax Information.

Privacy Act and Paperwork Reduction Act Notice. We

ask for the information on Form 8973 to carry out the Internal

Revenue laws of the United States. Our authority to request

the information is Internal Revenue Code sections 3511 and

7705 and the regulations thereunder. We use this information

to record the start or end of a service contract between a

CPEO and the customer. A customer isn’t required to enter

into a service agreement with a CPEO. However, if a

customer chooses to enter into a service contract with a

CPEO, both the customer and the CPEO are required to

provide the information requested. Section 6109 requires the

customer and the CPEO to provide their identification

numbers. If the customer or CPEO fails to provide the

information in a timely manner, or provides false or fraudulent

information, the customer and the CPEO may be subject to

penalties. Additionally, if the CPEO fails to provide this

information in a timely manner, or provides false or fraudulent

information, the IRS may revoke or suspend its certification.

By signing, dating, and entering the CPEO’s EIN at the

bottom of the consent, you allow the IRS, to the extent

necessary to carry out the purposes of the CPEO program, to

disclose information to the customer named on the consent

from the CPEO’s employment tax returns (for example,

Forms 940 and 941) as it relates to the customer named on

the consent. This consent also covers the disclosure of any

information regarding the CPEO’s obligations to report,

deposit, and pay federal employment taxes for the customer

named on the consent. You also consent to the disclosure of

information regarding the CPEO’s certification, regardless of

year. You must enter the following information on the

consent.

Customer’s name. Enter the customer’s name as shown in

Part 2.

Neither the CPEO nor the customer is required to provide

the information requested on a form that is subject to the

Paperwork Reduction Act unless the form displays a valid

OMB control number. Books or records relating to a form or

its instructions must be retained as long as their contents

may become material in the administration of any Internal

Revenue law.

Customer’s EIN. Enter the customer’s EIN as shown in Part

2.

Tax form number. Enter the tax form the CPEO files that

will include information related to the customer named on the

consent. Enter only one tax form on each line.

!

Don’t use a general reference such as “All tax forms”

in place of the actual tax form number.

Generally, tax returns and return information are

confidential, as required by section 6103. However, section

6103 allows or requires us to disclose this information to

others as described in the Code. We may disclose your tax

information to the Department of Justice for civil and criminal

litigation, and to cities, states, the District of Columbia, and

U.S. commonwealths and possessions to administer their tax

laws. We may also disclose this information to other

countries under a tax treaty, to federal and state agencies to

enforce federal nontax criminal laws, or to federal law

enforcement and intelligence agencies to combat terrorism.

CAUTION

Year(s) or period(s). Enter the year(s) or period(s) for

which you consent to the disclosure of tax information. You

may not list more than 3 years or 12 quarters. However, we

recommend that you list exactly 3 years or 12 quarters

because you must renew the consent, if you’re still under a

service contract with the customer named on the consent,

when the last year or period listed on the consent ends.

Example. You may list “2019–2021” or “2019, 2020,

2021” for returns filed annually. For returns filed quarterly,

you may list “2nd Qtr. 2019–1st Qtr. 2022,” or you can list the

years (as shown earlier) if those years include all four

quarters.

The time needed to complete and file Form 8973 will vary

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

CAUTION period(s).

!

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . .

Learning about the law or the form . . . . . . . . . . .

Preparing and sending the form to the IRS . . . . . .

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.

15 min.

1 hr.

15 min.

If you have comments concerning the accuracy of these

time estimates or suggestions for making Form 8973 simpler,

we would be happy to hear from you. You can send us

comments from IRS.gov/FormComments. Or you can write to

the Internal Revenue Service, Tax Forms and Publications

Division, 1111 Constitution Ave. NW, IR-6526, Washington,

DC 20224. Don't send Form 8973 to this address. Instead,

see Where To File, earlier.

Renewing the CPEO Consent to Disclosure of

Tax Information

If you’re still under a service contract with the customer

named on the consent before the end of the last year or

period listed on the most recent prior consent, you must

renew the consent by sending a new consent to the IRS. The

renewed consent can cover an additional 3 years or 12

quarters. For details, see Year(s) or period(s) above. You

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Instructions for Form 8973 (Rev. 12-2018)