Essential IRS Pubs | consulting

Essential IRS Publications for Employers

Everyone has to deal with the Internal Revenue Service, but no one seems to like it. But when it comes to reliable payroll information for employers, I personally have never found a better source.

Why do I believe that to be true? First, consider how the whole federal tax law structure works. Congress passes tax laws that become part of the Internal Revenue Code (IRC), often without any clear idea of how the law can be implemented on a practical basis. Next, the regulations that implement the IRC have to be incorporated in the Code of Federal Regulations (CFR).

At this point it is the role of the IRS to determine how the regulations are to be implemented, and it has the task of educating taxpayers. It accomplishes that task by preparing publications that explain the tax law and provide direction on how to implement it in a business.

Over the years I have found the publications of the IRS to be very clear, and they often contain practical examples showing how the definitions or regulations are to be implemented. The following is my personal list of IRS publications that are essential for employers, and all of them can be downloaded or accessed from the IRS website (www.irs.gov).

Publication 15, (Circular E), Employer's Tax Guide – This one provides all of the basic information that a business must have if it has employees. Publication 15 defines employees, wages, and supplemental wages, and it provides instructions on how to withhold taxes from employee's wage and deposit them. This publication is so important that years ago it was automatically mailed to employers each year.
Publication 15-A, Employer's Supplemental Tax Guide – The information in Publication 15 is basic, but Publication 15-A provides details on such subjects as independent contractors, special forms of wages or compensation, sick pay, etc.
Publication 15-B, Employer's Tax Guide to Fringe Benefits – A fringe benefit is a form of pay in addition to wages. It can include such things as insurance, use of a company vehicle, awards, dependent care assistance, etc. Some fringe benefits are taxable, and some are not. The tax laws regarding fringe benefits are found in many different places in the IRC, but this publication puts all of the information in one convenient place.
Publication 505, Tax Withholding and Estimated Tax – Although this publication is directed toward employees, the information in Chapter 1 can be useful to employers in explaining why taxes are withheld from certain payments.
IRS Withholding Calculator – This isn't a publication; it's a website. The IRS advises that employers should not help employees complete Form W-4. If an employee needs help to complete the form, employers can direct the employee to this website and Publication 505.