rp-13-39.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 31.3504-1: Designation of Agent by Application

Rev. Proc. 2013-39

SECTION 1. PURPOSE
This Revenue Procedure describes and updates the procedure for requesting the
IRS authorize a person to act as agent under section 3504 of the Internal Revenue
Code (Code) and §31.3504-1 of the Employment Tax Regulations for purposes of
Chapters 21, 22, 24, and 25 of the Code. Special instructions are also set forth for
agents authorized to perform acts for purposes of Chapter 23 of the Code.
SECTION 2. BACKGROUND
.01 Chapters 21, 22, 23, 24, and 25 of the Code impose obligations on
employers with regard to employment taxes. Specifically, Chapter 21 imposes Federal
Insurance Contributions Act (FICA) tax, Chapter 22 imposes Railroad Retirement Tax
Act (RRTA) tax, Chapter 23 imposes Federal Unemployment Tax Act (FUTA) tax,

Chapter 24 imposes Collection of Income Tax at Source on Wages (income tax
withholding), and Chapter 25 provides general provisions relating to employment taxes.
.02 Section 3504 of the Code authorizes the Secretary to promulgate regulations
to authorize a fiduciary, agent, or other person (“agent”) who has the control of,
receives, has custody of, disposes of, or pays the wages of an employee or group of
employees, employed by one or more employers, to perform certain specified acts
required of employers. Under section 3504, all provisions of law (including penalties)
applicable with respect to an employer are applicable to the agent and remain
applicable to the employer. Accordingly, both the agent and employer are liable for the
employment taxes and penalties associated with the employer’s employment tax
obligations undertaken by the agent.
.03 Section 31.3504-1(a) as amended by T.D. 9649, effective December 12,
2013, provides that the Internal Revenue Service (IRS) may authorize a person who
pays, controls, receives, has custody of, or disposes of (collectively “paid”) wages or
compensation of an employee or group of employees employed by one or more
employers as an agent. The regulation provides that applications for authorization to
act as agent shall be signed by the agent and employer and made on the form
prescribed by the IRS, and shall be filed with the IRS as prescribed in the instructions to
the form and other applicable guidance. Generally this authorization is applicable to
FICA tax, RRTA tax, and income tax withholding and relevant general employment tax
provisions under the Code.
.04 Section 31.3504-1(b) as amended by T.D. 9649, effective December 12,

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2013, permits an agent authorized for purposes of FICA tax and income tax withholding
to perform acts required of an employer who is a home care service recipient to also be
authorized for purposes of FUTA tax. Section 31.3504-1(b)(2) defines “home care
services” to include health care and personal attendant care services rendered to the
home care service recipient. Section 31.3504-1(b)(3) defines a “home care service
recipient” as an individual who receives home care services while enrolled, and for the
remainder of the calendar year after ceasing to be enrolled, in a program administered
by a Federal, state, or local government agency that provides Federal, state, or local
government funds to pay, in whole or in part, for home care services for that individual.
.05 Rev. Proc. 70-6, 1970-1 C.B. 420, sets forth procedures to be followed in
requesting authorization to act as agent under section 3504 for purposes of FICA tax,
RRTA tax, income tax withholding, and general provisions relating to employment tax.
It provides that application for authorization should be made in writing by the agent,
accompanied by Form 2678, Employer Appointment of Agent, executed by each
employer for whom the agent is to act. The agent must file one return for each tax-
return period, and maintain records that will disclose the full wages paid to each
employee on behalf of, and identified by, each employer for whom the agent acts.
.06 Rev. Proc. 80-4, 1980-1 C.B. 581, sets forth the procedures to be followed
by state and local health and welfare agencies wishing to act as agents under section
3504 for welfare recipients who become the employers of individuals furnished by the
agencies to provide in-home domestic service for the welfare recipients. It provides that
the state or local agency does not need to receive a Form 2678 from each welfare

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recipient/employer, so long as its application to the IRS references the document that
the welfare recipient/employer filed with the agency appointing the agency as agent.
The guidance also provides that when a welfare recipient/employer is liable for FUTA
tax, the IRS will interpose no objection if the state or local agency acting as an agent for
FICA tax and income tax withholding, also acts as an agent for FUTA tax. However,
Rev. Proc. 80-4 does not apply to state and local welfare agencies that contract with
outside organizations to provide the in-home domestic services.
.07 Notice 95-18, 1995-1 C.B. 300, provides guidance to household employers
on rules regarding federal employment taxes and income tax withholding under section
2 of the Social Security Domestic Employment Reform Act of 1994 (the Act), Pub. L.
103-387. The Act added section 3510 to the Code to provide that returns with respect
to domestic service employment taxes be made on a calendar year basis, and amended
the FICA provisions of the Code to establish an annual threshold for cash remuneration
paid by an employer to an employee for domestic service in a private home of the
employer in order to be subject to FICA tax. The notice explains the major changes
made by the Act and has a series of questions and answers related to household
employers.
Specifically, the notice provides that state and local government health and
welfare agencies that act as agents pursuant to Rev. Proc. 80-4 should obtain a
separate employer identification number (EIN) for use in reporting taxes with respect to
individuals furnished by the agencies to provide household services for recipients of
public assistance. It also provides that the IRS will waive penalties for these state and

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local government health and welfare agencies for failure to deposit the FICA and FUTA
taxes and withheld income taxes on wages paid to household employees during 1995,
provided all taxes are deposited on or before the due date of the applicable return.
.08 Notice 2003-70, 2003-2 C.B. 916, proposes a revenue procedure giving
updated guidance to state and local government agencies on how they can serve as
agents (“state agents”) under section 3504 for disabled individuals and other welfare
recipients (“service recipients”) who employ home-care service providers to assist them
in their homes. The notice provides that until a final version of the proposed revenue
procedure is issued, the IRS will not challenge the way a state meets the employment
tax obligations with respect to home-care service providers employed in its in-home
domestic services program if the employment taxes are being timely withheld, reported,
and paid, and the procedures for reporting and paying the taxes are based on a
reasonable, good faith interpretation of existing guidance, including on positions set
forth in the proposed revenue procedure.
Notice 2003-70 proposes to modify Rev. Proc. 80-4 to apply not only to state and
local agencies that furnish individuals to provide in-home domestic services, but also to
state and local agencies that do not furnish the individuals who provide in-home
domestic services. The notice allows the state agent to remit taxes with a timely filed
return rather than make deposits according to the schedule that would otherwise be
applicable under §31.6302-1. It also allows the service recipient to designate the state
agent without having to obtain an EIN as he or she would otherwise be required to do in
order to execute a Form 2678.

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Notice 2003-70 also provides guidance on withholding and reporting rules for
third parties acting either as a “reporting agent” of the state agent or as a “subagent” of
the state agent. The notice explains that a reporting agent is an accounting service,
franchiser, bank, service bureau or other entity authorized to perform one or more acts
on behalf of an employer, including sign and file Forms 940, Employer’s Annual Federal
Unemployment Tax Act (FUTA) Return, and 941, Employer’s QUARTERLY Federal Tax
Return, and make federal tax deposits for the taxes reported on these forms. The
notice defines a subagent as an individual or entity designated as an agent by a state
agent in accordance with Rev. Proc. 70-6 and the notice. Notice 2003-70 provides that
both a reporting agent and subagent of a state agent should use the special EIN of the
state agent, and file one Form 940 using the name and special EIN of the state agent
on behalf of all service recipients for whom it acts. The notice allows the reporting
agent of the state agent to remit taxes with a timely filed return. The subagent of the
state agent must follow the deposit schedule in §31.6302-1 that is otherwise applicable.
.09 The purpose of this revenue procedure is to update and consolidate the
previously issued guidance discussed in this section and incorporate recently finalized
rules related to home care service recipients (HCSRs). The updates to the prior
guidance principally reflect changes already implemented in IRS administrative
processes. For example, the IRS no longer requires an application for authorization to
act as agent to accompany Form 2678. Also, Form 941-X, Adjusted Employer’s
QUARTERLY Federal Tax Return or Claim for Refund, has replaced Form 941c,
Supporting Statement To Correct Information, for correcting wages, and since 2010,

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agents have been required to attach allocation schedules to their aggregate returns.
Other changes that modify current procedures are noted.
.10 The term “wages” as used in this revenue procedure shall be construed to
include compensation under the RRTA unless the context indicates otherwise.
SECTION 3. GENERAL RULES TO REQUEST AUTHORIZATION TO ACT AS AGENT
.01 To request that the IRS authorize an agent under §31.3504-1 to perform acts
required of an employer, the parties must use Form 2678, Employer/Payer Appointment
of Agent.
.02 The employer submits a properly executed Form 2678 to the person it
wishes to appoint as agent, indicating on Form 2678 the acts for which it seeks to
appoint the agent and whether the agent will be appointed with regard to some or all of
the employer’s employees. If the employer anticipates paying any wages (such as
taxable noncash fringe benefits or bonuses) to any of its employees, the employer must
indicate on Form 2678 that the appointment of the agent is only for some of its
employees. To accept the appointment, the agent files Form 2678 with the IRS as
provided in the form instructions. If either the employer or the person the employer
wishes to appoint as agent has not obtained an EIN prior to the filing of the Form 2678,
the agent must include a properly executed Form SS-4, Application for Employer
Identification Number, with the Form 2678 to request an EIN for the employer or agent
as necessary.
.03 If the IRS approves the request, the IRS sends a letter of approval to the
agent and employer, except as provided in section 10.03 of this revenue procedure.

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The authorization to act as agent is effective on the date indicated in the letter of
approval mailed by the IRS.
.04 If the IRS approves the request and the authorization is with respect to all
the employer’s employees, the employer may need to file a final return for any form the
agent is authorized to file. Specifically, the employer enters its name and EIN in the
spaces provided for the employer and indicates that it is a final return in the manner
provided in the form instructions. If the agent was authorized for some employees only
(including because the employer was expecting to pay some wages in accordance with
section 3.02 of this revenue procedure), the employer does not file a final return, but
must continue filing a return with regard to the other employees (or wages). The
employer does not file a final return if the employer was not required to file a return prior
to the agent’s authorization, for example, because the employer had not previously paid
wages to any employees.
.05 The provisions of law (including penalties) applicable with respect to an
employer that are made applicable to the agent under section 3504 remain applicable to
the employer and agent.
SECTION 4. FILING OF RETURNS BY AGENT WITH APPROVED FORM 2678
.01 The agent with an approved Form 2678 is required to file one return for each
tax-return period reporting the wages and employment taxes on the wages paid to its
employees, and the wages and employment taxes on the wages paid by the agent to
the employees of each employer for whom the agent is authorized to act (“aggregate
return”).

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.02 The agent's name and EIN are entered in the spaces provided for the
employer on the returns, and the returns are to be executed in accordance with the form
instructions.
.03 The agent must complete an allocation schedule and attach it to each
aggregate return as described in the form instructions. On the allocation schedule, the
agent lists the name and EIN of each employer for whom the agent is authorized to act
and allocates the wages, taxes, and payments reported on the aggregate return to each
employer. For example, the IRS has designated Schedule R (Form 941), Allocation
Schedule for Aggregate Return Filers, as the allocation schedule to attach to an
aggregate Form 941. The agent is responsible for maintaining records that show the
wages paid by the agent to each employee on behalf of, and identified by, each
employer for whom the agent is authorized to act. The employer is responsible for
maintaining records that show the wages paid by the agent to its employees. See
§§31.6001-1 through 31.6001-5.
.04 The wages paid to an employee are considered with respect to each
employer separately, and not in conjunction with the wages paid to the employee by the
agent as employer or by the agent on behalf of any other employer, for purposes of any
dollar threshold or wage base applicable in determining the employment tax liability.
.05 Generally, the agent furnishes and files one Form W-2, Wage and Tax
Statement, for each employee. The agent’s EIN is entered in the spaces provided for
the employer. The name of the agent, followed by “Agent for (name of employer),” is
entered in the space provided for the employer. If the agent (a) is acting as an agent for

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two or more employers or is an employer and is acting as an agent for another
employer, (b) pays social security wages to an individual on behalf of more than one
employer, and (c) the total of the individual's social security wages from these
employers is greater than the social security wage base, the agent furnishes and files
separate Forms W-2 for the affected employee reflecting the wages paid by each
employer.
SECTION 5. DEPOSITS BY AGENT WITH APPROVED FORM 2678
Except as provided in section 10.05 of this revenue procedure, the deposit rules
apply to the agent with an approved Form 2678 based on the total employment taxes
accumulated by the agent for its own employees and on behalf of all employers for
whom the agent is authorized to act. The deposit rules that would have applied to any
employer for whom the agent acts, had the agent not been authorized, do not apply to
the agent.
SECTION 6. CORRECTIONS OF WAGES BY AGENT WITH APPROVED FORM 2678
Wages erroneously reported by the agent must be corrected by the agent on
behalf of the employer using the form that corresponds to the return being corrected.
For example, the IRS has designated Form 941-X as the form to correct errors on a
previously filed Form 941. The agent attaches an allocation schedule as prescribed in
the instructions for the form being filed. The name and EIN of the agent are entered in
the spaces provided for the employer as it appeared on the return being corrected.
Generally, the agent’s obligation to make the correction is not affected by a subsequent
revocation of the authorization as discussed in section 9 of this revenue procedure.

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However, an agent may not make corrections after its authorization to act as agent is
revoked by the IRS under section 9.02 of this revenue procedure.
SECTION 7. USE OF REPORTING AGENT BY AGENT WITH APPROVED FORM
2678
.01 A reporting agent is an accounting service, franchiser, bank, service bureau,
or other entity authorized to perform one or more acts on behalf of a taxpayer. See
Rev. Proc. 2012-32, 2012-35 IRB 1, for rules related to reporting agent authorizations
and a description of the acts that may be performed by reporting agents. An agent with
an approved Form 2678 may designate a reporting agent to sign and file certain
employment tax returns and make tax deposits on behalf of the agent.
.02 The reporting agent files only one return on behalf of the agent for each tax
return period. The agent's name and EIN, not the reporting agent’s name and EIN, are
entered in the spaces provided for the employer on the returns. If the return instructions
prescribe an allocation schedule, the reporting agent is required to enter the name and
EIN of the agent as shown on the return, and list the name and EIN of each employer
for whom the agent is authorized to act in the spaces provided for clients.
.03 The deposit rules that apply to the agent continue to apply with regard to
deposits made by the reporting agent.
.04 The agent is responsible for maintaining records that show the wages paid
by the agent to each employee on behalf of, and identified by, each employer for whom
the agent is authorized to act. The employer is responsible for maintaining records that
show the wages paid by the agent to its employees. See §§31.6001-1 through

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31.6001-5.
.05 The provisions of law (including penalties) applicable with respect to an
employer that are made applicable to the agent under section 3504 remain applicable to
the employer and agent.
SECTION 8. USE OF SUBAGENT BY AGENT WITH APPROVED FORM 2678
.01 An agent with an approved Form 2678 (“first agent” for purposes of this
section) may want to appoint an agent under section 3504 (“subagent”) using the
procedures described in section 3 of this revenue procedure.
.02 If the subagent is authorized by the IRS, the rules described in section 4
related to filing of returns apply to the subagent as an agent. For example, the
subagent is required to attach Schedule R (Form 941) with its own name and EIN
entered as shown on the return, and list the name and EIN of each employer who
appointed the first agent, and for whom the subagent is authorized to act, in the spaces
provided for clients. Unless the subagent is appointed to deposit, pay, and file on behalf
of the first agent in the agent’s capacity as employer, the first agent is not listed as a
client on Schedule R (Form 941).
.03 The rules described in section 5 of this revenue procedure related to
deposits and section 6 of this revenue procedure related to corrections of wages apply
to the subagent as an agent.
.04 The subagent and agent are responsible for maintaining records that show
the wages paid by the subagent to each employee on behalf of, and identified by, each
employer for whom the subagent is authorized to act. The employer is responsible for

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maintaining records that show the wages paid by the agent and subagent to its
employees. See §§31.6001-1 through 31.6001-5.
.05 The provisions of law (including penalties) applicable with respect to an
employer that are made applicable to the subagent and the first agent under section
3504 remain applicable to the employer, first agent, and subagent.
SECTION 9. REVOCATION OF AUTHORIZATION OF AGENT WITH APPROVED
FORM 2678
.01 The employer or agent with an approved Form 2678 may request the IRS
revoke an existing authorization using Form 2678, executed by the party seeking to
revoke the appointment. Except as provided in section 10.07 of this revenue procedure,
the IRS confirms the revocation by letter to the agent and employer, and the revocation
is effective on the date indicated in the letter mailed by the IRS.
.02 The IRS may independently revoke an existing authorization if the facts and
circumstances indicate such revocation is warranted. Except as provided in section
10.07 of this revenue procedure, the revocation is by notice to the agent and employer.
The revocation of the authorization is effective when the IRS mails the notice.
.03 An agent files Form 2678 to revoke an authorization if there is no longer an
agency relationship, for example, because the employer or agent goes out of business,
the employer no longer exists due to a merger or acquisition, the employer is deceased,
or the employer appoints another person on Form 2678 to act as agent for the same
acts the agent is authorized to perform.
.04 If the agency relationship is being terminated because the employer appoints

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another person to act as agent, the agent whose authorization is being revoked is liable
to report, deposit, and pay taxes on behalf of the employer with regard to wages it paid
during periods for which it was authorized to act as agent of the employer. It remains
liable for such employment taxes even after the authorization is revoked as provided in
this section.
SECTION 10. SPECIAL RULES FOR AGENTS OF HOME CARE SERVICE
RECIPIENTS, INCLUDING FOR STATE AGENTS
.01 Except as otherwise provided in this section, the rules generally applicable to
agents and employers described in sections 3, 4, 5, 6, 7, 8, and 9 of this revenue
procedure shall apply to a person authorized to act as agent for an employer who is a
home care service recipient (HCSR) as defined in §31.3504-1(b)(3). This section also
sets forth special rules that apply to state agents. For purposes of this revenue
procedure, a state agent is a state or local government agency administering a program
to provide home care services, as defined in §31.3504-1(b)(2), which has been
authorized by the IRS as agent for a HCSR. Only government agencies can be state
agents. Third parties, whether nonprofit or for-profit, that are engaged by a government
agency to administer all or some aspects of a home care services program are not state
agents for purposes of this revenue procedure.
.02 Section 31.3504-1(b) provides that the IRS may authorize a person to act as
agent on behalf of an employer who is a HCSR with respect to FUTA taxes imposed on
wages paid for home care services, as defined in §31.3504-1(b)(2), provided that the
person has been authorized to act as agent for the HCSR for income tax withholding

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and FICA tax purposes under §31.3504-1(a).
.03 The general rules to request authorization to act as agent set forth in section
3 of this revenue procedure apply to request authorization to act as agent for a HCSR,
including for FUTA tax purposes, except that the letter mailed by the IRS approving the
request will only be sent to the agent. Sections 10.03(1) through 10.03(3), below,
provide special rules for state agents when requesting authorization to act as agent of
HCSRs.
(1) A state agent may request authorization from the IRS without filing Form
2678 on behalf of each HCSR for whom the state agent seeks to act. In lieu of Form
2678, the state agent may solicit appointment by each HCSR on the forms the
individuals must complete in order to enroll in the program administered by the state
agent. The state agent submits a letter to the IRS address to which it would have been
required to submit the Forms 2678. The letter must reference the forms appointing the
state agent and identify each HCSR for whom the state agent wishes to be authorized
by either (a) including each HCSR’s name and EIN on a list, or (b) including a properly
executed Form SS-4 for the HCSR if the HCSR has not previously obtained an EIN,
with its letter to the IRS. State agents were not previously required to notify the IRS of
the HCSRs for whom they acted; however, notification is now necessary to ensure the
IRS’ records properly reflect the parties’ filing requirements and to ensure the correct
taxes are reported and paid by the agent on behalf of each HCSR. The notification
procedures apply with respect to each HCSR who enrolls in the program and wishes to
appoint the state agent. The state agent must also notify the IRS of each HCSR for

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whom its authority to act as agent is revoked.
(2) Because Rev. Proc. 80-4 allowed HCSRs to appoint state agents without
filing Form 2678, Notice 2003-70, Q&A 10, provided that HCSRs who appoint state
agents do not need to obtain an EIN if an EIN is not required for any other purpose.
The IRS now requires all agents to file allocation schedules which show information for
each employer, identified by the employer’s EIN. Therefore, all HCSRs, including those
whose agents were authorized before the effective date of this revenue procedure, must
now obtain an EIN so the state agent may fulfill its reporting obligations to the IRS. See
also section 6109 and §31.6011(b)-1. As indicated in section 10.03(1) of this revenue
procedure, if the HCSR has not previously obtained an EIN, the state agent may assist
a HCSR in applying for an EIN by including a properly executed Form SS-4 on behalf of
the HCSR with the state agent’s request for authorization to act as agent. HCSRs
whose agents were authorized before the effective date of this revenue procedure who
do not have an EIN must apply for an EIN within a reasonable period of time after the
effective date of this revenue procedure.
(3) All state agents should use Form SS-4 to request a special EIN for the state
agent to report and pay taxes on behalf of the HCSRs for whom the state agent acts.
The application for the special EIN should indicate the state agent is a government
entity. The state agent may not use its special EIN to report or pay employment taxes
for wages paid for services other than home care services, or for an employer who is
not a HCSR.
.04 The filing of return procedures set forth in section 4 of this revenue

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procedure apply to agents authorized to act on behalf of a HCSR for any returns the
agent is authorized to file. For example, the agent with an approved Form 2678 for
FUTA tax purposes files one aggregate Form 940 for each tax-return period reporting
the FUTA tax liability related to wages it pays to its employees and to wages it pays for
home care services to employees of each HCSR for whom the agent is authorized to
act. The IRS has designated Schedule R (Form 940), Allocation Schedule for
Aggregate Form 940 Filers, as the allocation schedule to attach to an aggregate Form
940. Sections 10.04(1) through 10.04(3), below, provide special rules for state agents
filing returns on behalf of HCSRs.
(1) As indicated in section 10.03(3) of this revenue procedure, state agents
should obtain a separate EIN to report and pay employment taxes on behalf of HCSRs.
The state agent enters its own name and special EIN in the spaces provided for the
employer.
(2) If the state agent designates a reporting agent, the reporting agent must
uses the state agent’s name and special EIN to report and pay employment taxes on
behalf of the HCSRs for whom the state agent is authorized to act.
(3) If the state agent appoints a subagent, the subagent must use its own name
and EIN to report and pay employment taxes on behalf of the HCSRs for whom the
state agent is authorized to act. Notice 2003-70, Q&A 27 permitted the subagent to use
a state agent’s special EIN in order to be able to report and pay FUTA taxes on behalf
of HCSRs. However, now that §31.3504-1(b) provides that any person, not just a state
agent, may be authorized as agent of a HCSR with respect to FUTA taxes owed for

17

home care services, it is no longer necessary for the subagent to use the state agent’s
special EIN in order to act as an agent for FUTA tax purposes. Furthermore, because
the subagent is subject to normal deposit rules, and the deposit rules that apply to the
state agent discussed in section 10.06 of this revenue procedure do not apply to the
subagent, the use of the state agent’s special EIN by the subagent is not appropriate.
.05 An agent authorized to act on behalf of a HCSR furnishes and files a Form
W-2 for each employee on behalf of each HCSR, unless the compensation is excepted
from both income tax withholding and FICA tax.
.06 The deposit procedures set forth in section 5 of this revenue procedure apply
to an agent authorized to act on behalf of a HCSR for any deposits the agent is required
to make. Sections 10.06(1) through 10.06(3), below, provide special rules for state
agents when making deposits.
(1) A state agent may remit FICA tax, FUTA tax, and income tax withholding on
behalf of a HCSR with a timely filed return, and the IRS will not assess any penalties for
failure to deposit timely. Other penalties may apply, for example, if taxes are not paid or
if a correct return is not timely filed.
(2) If the state agent uses a reporting agent, the reporting agent may deposit
taxes with a timely filed return.
(3) If the state agent uses a subagent, the deposit rules apply to the subagent
based on the total taxes accumulated by the subagent for its employees and on behalf
of all employers, including HCSRs, for whom it is authorized to act. The deposit rules
that would have applied to any employer, or to the state agent, had the subagent not

18

been appointed, do not apply to the subagent.
.07 The revocation procedures set forth in section 9 of this revenue procedure
are generally followed to revoke an appointment of an agent authorized to act on behalf
of a HCSR, except that the letter confirming the revocation will only be sent to the
agent. Sections 10.07(1) through 10.07(4), below, provide special rules related to
revocations for FUTA tax purposes.
(1) Under §31.3504-1(b), the agent may only act for FUTA tax purposes for a
HCSR while the HCSR is enrolled, and for the remainder of the calendar year in which
he or she ceases to be enrolled, in a government program. If a HCSR ceases to be
enrolled in a government program during the year, an agent may report and pay FUTA
taxes on behalf of that HCSR either for the entire calendar year, or for a portion of the
calendar year, as described in sections 10.07(2) and 10.07(3) below.
(2) The agent may report and pay FUTA taxes on wages it paid for home care
services for the HCSR for the entire calendar year in which the HCSR ceases to be
enrolled, but not after such year. The agent files a Form 2678 to request the IRS to
revoke the authorization with respect to FUTA taxes by the end of the calendar year in
which the individual ceases to be a HCSR.
(3) The agent may report and pay FUTA taxes only for the portion of the year it
paid wages for home care services for the HCSR. If the agent stops paying wages for
home care services for the HCSR before the end of the calendar year, the agent must
file a Form 2678 to request the IRS to revoke the authorization for FUTA taxes when the
agent stops paying wages or otherwise stops acting as agent with respect to the

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HCSR’s FUTA taxes.
(4) Under either sections 10.07(2) or 10.07(3), above, the agent may still act as
agent with respect to the individual’s FICA tax and income tax withholding
responsibilities.
SECTION 11. EXAMPLES
The rules provided in this revenue procedure are illustrated by the following
examples.
Example 1. Final return. Employer B and Agent W complete and file Form 2678
to request the IRS authorize Agent W to file Form 941 with respect to all of Employer
B’s employees. The IRS approves the authorization effective April 1, 2014. Employer
B files a Form 941 for the first quarter of 2014, indicating that it is a final return by
checking the appropriate box and entering that it stopped paying wages as of March 31,
2014. For periods beginning on and after April 1, 2014, Agent W pays wages to all of
Employer B’s employees, makes related employment tax deposits and payments, and
reports the wages and taxes on an aggregate Form 941. Agent W attaches Schedule R
(Form 941) listing Employer B as a client.
Example 2. No final return. Same facts as Example 1, except that Employer B is
a new business that has not paid wages to any employees prior to the effective date of
the authorization. Therefore, Employer B does not file a final Form 941.
Example 3. Authorization for some employees. Employer C and Agent V
complete and file Form 2678 to request the IRS authorize Agent V to file Form 941 with
respect to some of Employer C’s employees. The IRS approves the authorization

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effective April 1, 2014. For periods beginning on and after April 1, 2014, Agent V pays
wages to some of Employer C’s employees, makes related employment tax deposits
and payments, and reports the wages and taxes on an aggregate Form 941. Agent V
attaches Schedule R (Form 941) listing Employer C as a client. Employer C continues
to pay wages for some employees, make related employment tax deposits, and report
the wages and taxes on its Form 941.
Example 4. HCSR and other employer. Agent Y is authorized to file Form 941
for Employer S and for Employer T, who is a home care service recipient (HCSR) as
defined in §31.3504-1(b)(3). Agent Y is also authorized to file Form 940 for Employer T.
Agent Y pays wages to all of Employer S’s and Employer T’s employees, makes
related employment tax deposits and payments, and reports the wages and taxes on an
aggregate Form 941. Agent Y attaches Schedule R (Form 941) listing Employer S and
Employer T as clients. Agent Y also reports wages and taxes with respect to home care
services provided to Employer T on an aggregate Form 940. Agent Y attaches
Schedule R (Form 940) listing Employer T as a client. Employer S files Form 940 with
respect to wages paid to its employees.
Example 5. State agent. State K funds a program to provide home care services
to eligible individuals. Department H administers the home care services program,
including disbursing the funds to pay for the services. Each of the individuals enrolled in
the program is a HCSR, as defined in § 31.3504-1(b)(3).
As part of the enrollment process, each HCSR completes a form to appoint
Department H as agent under section 3504 of the Code to file Form 940 and Form 941

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for the HCSRs. Department H sends a letter to the IRS stating it is a government
agency that wishes to become a state agent. Department H attaches to the letter a
sample copy of the form it uses to be appointed by a HCSR, a list of the names and
EINs of each HCSR that has appointed Department H as agent, and a Form SS-4 with
respect to each HCSR named in its letter that does not have an EIN. Department H
also attaches a Form SS-4 to apply for a special EIN for it to use as state agent of the
HCSRs enrolled in its home care services program that have appointed Department H
as agent. Department H receives a letter from the IRS authorizing it as agent for each
HCSR.
Department H pays wages to the HCSR’s employees and reports the wages and
taxes on an aggregate Form 941, with its name and special EIN entered in the space
provided for the employer. Department H attaches Schedule R (Form 941), listing each
HCSR as a client. Because Department H is a state agent, it remits payment with its
timely filed aggregate Form 941.
Department H also reports wages and taxes with respect to the HCSRs on an
aggregate Form 940 with its name and special EIN entered in the space provided for
the employer. Department H attaches Schedule R (Form 940), listing each HCSR as a
client. Because Department H is a state agent, it remits payment with its timely filed
aggregate Form 940.
Example 6. State agent designates reporting agent. Same facts as Example 5.
The following year (Year 2) Department H designates reporting agent R with respect to
HCSRs for whom Department H is authorized as state agent, by following the

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procedures described in Rev. Proc. 2012-32. Reporting agent R enters Department H’s
name and special EIN in the space provided for the employer on the aggregate
employment tax returns and on the attached allocation schedules. Reporting agent R
lists each HCSR as a client on each allocation schedule. Reporting agent R also remits
payment for employment taxes with the timely filed employment tax returns.
Example 7. State agent appoints subagent. Same facts as Example 5, except in
Year 2, Department H appoints S as its subagent on Form 2678 with respect to the
HCSRs for whom Department H is authorized as state agent. The IRS approves the
authorization.
Subagent S pays wages to the HCSRs’ employees, makes related employment
tax deposits and payments, and reports the wages and taxes on an aggregate Form
941, with its name and EIN entered in the space provided for the employer. Subagent S
attaches Schedule R (Form 941), listing each HCSR as a client. Subagent S also
reports wages and taxes with respect to the HCSRs on an aggregate Form 940 with its
name and EIN entered in the space provided for the employer. Subagent S attaches
Schedule R (Form 940), listing each HCSR as a client.
Example 8. Form 940 revocation – end of year. Individual A, a HCSR as defined
in §31.3504-1(b)(3), has only home care service employees. Individual A and Agent X
complete and file Form 2678 to request the IRS to authorize Agent X to file Form 941
and Form 940 with respect to the employees providing home care services to Individual
A. The IRS approves the authorization effective January 1, 2014.
On July 31, 2014, Individual A ceases to be enrolled in the government program

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but continues to receive home care services which Agent X pays for with private funds
provided by Individual A. Under §31.3504-1(b)(3), Individual A continues to be a HCSR
for the remainder of the calendar year after ceasing to be enrolled in the government
program.
Agent X reports the wages and taxes with respect to Individual A for the entire
year on an aggregate Form 940. Agent X attaches Schedule R (Form 940) listing
Individual A as a client.
The IRS approves Agent X’s request, filed on Form 2678, to revoke its
authorization to file Form 940 for Individual A, effective December 31, 2014. Agent X
remains authorized to file Form 941 for Individual A.
Example 9. Form 940 revocation – before end of year. Same facts as Example
8, except that the IRS approves Agent X’s request, filed on Form 2678, to revoke its
authorization to file Form 940 for Individual A, effective August, 1, 2014.
Agent X reports the wages and taxes accrued with respect to Individual A on or
before July 31, 2014, on an aggregate Form 940. Agent X attaches Schedule R (Form
940), listing Individual A as a client. Individual A is responsible for reporting wages and
taxes accrued with respect to wages paid for home care services on or after August 1,
2014.
SECTION 12. EFFECT ON OTHER DOCUMENTS
Notice 95-18, 1995-1 C.B. 300, is modified in part. Rev. Proc. 70-6, 1970-1 C.B.
420, Rev. Proc. 80-4, 1980-1 C.B. 581, and Notice 2003-70, 2003-2 C.B. 916, are
modified and superseded. This document does not affect authorizations in effect under

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Rev. Proc. 70-6, Rev. Proc. 80-4, or by reasonable reliance on Notice 2003-70, as of
the effective date of this revenue procedure. However, agents must follow the rules of
this revenue procedure after its effective date to make requests for authorization to act
as agent and, with regard to all authorizations, to make employment tax payments and
deposits, and to file and correct employment tax returns.
SECTION 13. EFFECTIVE DATE
This revenue procedure is effective on and after December 12, 2013.
SECTION 14. DRAFTING INFORMATION
The principal author of this revenue procedure is Michelle R. Weigelt of the Office
of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities).
For further information regarding this revenue procedure contact Michelle R. Weigelt at
202-317-6798 (not a toll free call).