Form 2678: Employer/Payer Appointment of Agent (2024)

What Form 2678 Is For

Form 2678 is an official IRS document that allows employers and payers to legally authorize someone else—called an "agent"—to handle their federal employment tax responsibilities. Think of it as giving someone power of attorney, but specifically for employment taxes. When you appoint an agent using this form, that person or company can file tax returns, make tax deposits, and submit payments on your behalf for Federal Insurance Contributions Act (FICA) taxes, Railroad Retirement Tax Act (RRTA) taxes, income tax withholding, and backup withholding.

This arrangement is particularly common in situations where employers use payroll service companies, fiscal agents, or professional employer organizations to manage their tax obligations. The form can also be used to revoke an existing agent appointment if you want to end the relationship and take back control of your tax responsibilities.

It's important to understand that appointing an agent doesn't eliminate your responsibility as the employer—you remain legally liable for all tax obligations even after the agent is appointed. The agent simply acts on your behalf, but if they fail to file returns or make payments, you're still on the hook. This shared liability is a critical feature of the arrangement and protects the IRS from losing tax revenue when third parties are involved.

A special provision exists for individuals who receive home care services through government programs. These home care service recipients can also request approval for an agent to handle Federal Unemployment Tax Act (FUTA) taxes, though this is generally not available to regular employers.

When You’d Use Form 2678

Late/Amended Filing

Form 2678 isn't subject to traditional tax deadlines like annual returns—instead, you file it whenever you need to change your tax reporting arrangement. You would file this form when you first want to appoint an agent, when you want to revoke an existing agent appointment, or when you need to modify the scope of an agent's authority.

The most common scenario is when a business decides to outsource its payroll processing to a professional service provider. Rather than handling employment tax deposits and quarterly returns in-house, the business completes Form 2678 to formally authorize the payroll company to act as its agent. The IRS typically processes these requests within 30 days of receipt, and the authorization becomes effective on the date specified in the approval letter the IRS sends to both parties.

You should also file Form 2678 if you're ending a relationship with a payroll provider or fiscal agent. Either the employer or the agent can initiate a revocation—only one signature is required. Once revoked, the agent immediately loses access to confidential tax information, and the employer must resume filing its own returns or appoint a new agent. The revocation is effective on the date shown in the IRS confirmation letter.

There's no "amended" version of Form 2678 because it doesn't report financial information that could be incorrect. If you need to change which tax forms your agent is authorized to file, you would submit a new Form 2678 with the updated selections checked off. If you discover that your agent has been filing returns incorrectly, you would use Form 941-X or other correction forms for the underlying tax returns, not Form 2678 itself.

For home care service recipients seeking FUTA tax authority for their agents, timing matters. You must request this approval before the agent begins handling any FUTA responsibilities, and approval for FUTA requires that the agent also be approved for FICA and income tax withholding.

Key Rules or Details for 2024

Current Revision Only

The December 2024 revision of Form 2678 includes several important updates and reminders that all filers should know. First, all prior versions of the form are now obsolete—the IRS will not accept outdated forms. This ensures that all appointments follow current procedures and regulations outlined in the latest instructions.

Scope of Authority Covers Related Forms

One significant clarification in the 2024 instructions addresses non-English forms. When authority is granted for any form listed on line 5, it automatically extends to related forms such as Spanish-language versions (like Form 941-SP), amended returns (such as Form 941-X), and payment vouchers. Previously, there was some confusion about whether separate authorization was needed for these related forms, but the 2024 instructions make clear that one authorization covers the entire form family.

Where to File

The form uses different mailing addresses depending on your business location. Employers in the eastern half of the country (including states like Connecticut, Delaware, New York, Pennsylvania, and Virginia) send their forms to Kansas City, Missouri. Those in the western states (including California, Texas, Colorado, and Washington) use the Ogden, Utah address. There's also a special address for exempt organizations and government entities filing Form 941.

Shared Liability

A critical rule involves shared liability. The 2024 instructions emphasize that all parties—the employer, the agent, and any third-party contractors the agent might hire—remain liable for filing all returns and making all deposits. If an agent contracts with a certified public accountant or reporting agent to handle the actual filing, and that contractor fails to perform, everyone in the chain shares responsibility. This creates strong incentive for agents to choose reliable subcontractors and for employers to monitor their agents' performance.

Partial Appointments

For employers who only want an agent to handle some employees or some types of payments (such as regular wages but not bonuses), the form includes a special checkbox. This allows for partial appointments where the employer continues to file separate returns under its own EIN for the wages not handled by the agent. The 2024 instructions provide helpful examples of how to structure these split arrangements.

Signature Authority

Finally, the form must be signed by someone with proper authority. For corporate agents, this must be a corporate officer with authority to execute appointments. For partnerships, it must be a partner or tax matters partner. Individual agents sign on their own behalf.

Step-by-Step (High Level)

Filing Process Overview

Step 1: Determine if You Need Form 2678

Decide whether you want to appoint an agent to handle your employment tax obligations or revoke an existing agent. Remember that you cannot appoint an agent for FUTA tax unless you're a home care service recipient, and if you do qualify for FUTA agent authority, you must also appoint the agent for FICA and income tax withholding.

Step 2: Complete Part 1

Check the appropriate box indicating whether you're appointing an agent or revoking an existing appointment. This tells the IRS what action to take with your form.

Step 3: Complete Part 2 (Employer/Payer Information)

Enter your Employer Identification Number (EIN), legal name, trade name (if different), and complete address. On line 5, check all the boxes for the tax forms you want your agent to handle—such as Form 941 (quarterly employment taxes), Form 940 (FUTA), Form 943 (agricultural employers), Form 944 (small employers), Form 945 (withholding on non-payroll payments), or Form CT-1 (railroad retirement). If the agent will only handle some employees or payments, check that additional box. The employer must sign and date Part 2.

Step 4: Complete Part 3 (Agent Information)

Have your agent provide their EIN or Social Security Number, name, trade name (if applicable), and complete address. The agent must sign and date Part 3 to accept the appointment. If you're revoking an agent, you can complete Part 3 yourself without the agent's signature.

Step 5: Mail the Form

Send the completed form to the appropriate IRS address based on your business location (see the "Where To File" section in the instructions). Don't try to file this form electronically—it must be mailed.

Step 6: Wait for IRS Approval

The IRS will process your request within approximately 30 days. They'll send approval letters to both the employer and the agent (or just to the agent if you're a home care service recipient). The authorization becomes effective on the date shown in the approval letter. Until you receive that approval, the agent cannot legally act on your behalf and has no liability for your tax obligations.

Step 7: Keep Records

Maintain copies of the form, the approval letter, and all correspondence. If you later revoke the appointment, you'll need this documentation to prove when the agent relationship began and ended.

Common Mistakes and How to Avoid Them

Mistake 1: Using an Outdated Version

Many employers download and save PDF forms, then use them months or years later. Form 2678 was revised in December 2024, and the IRS will reject all prior versions. Always download a fresh copy from IRS.gov/Form2678 before filing to ensure you're using the current version.

Mistake 2: Assuming Approval is Automatic

Some employers and agents begin operating as if the appointment is effective as soon as they mail Form 2678. This is wrong and potentially illegal. The agent has no authority and no liability until the IRS processes the request and issues an approval letter showing the effective date. Operating prematurely can lead to filing confusion and penalties.

Mistake 3: Mixing Up Business Types on Home Care Requests

The 2024 instructions specifically warn that if you check the box requesting FUTA agent authority as a home care service recipient, the name on line 2 must be an individual, never a business entity. Home care service recipients are always individuals receiving government-program services. If you enter a business name and check this box, the IRS will reject your form.

Mistake 4: Not Understanding Continued Liability

Many employers believe that appointing an agent transfers all responsibility for tax compliance. This is false. The employer, agent, and any third-party contractors all remain jointly and severally liable. If your agent fails to make deposits or file returns, you're still responsible for penalties and interest. Avoid this by monitoring your agent's performance, reviewing IRS notices promptly, and periodically checking that deposits and returns are being filed correctly.

Mistake 5: Incomplete Revocations

When terminating an agent relationship, employers sometimes notify the agent but forget to file Form 2678 with the IRS to formalize the revocation. The agent retains legal authority and access to tax information until the IRS processes a revocation form and issues a confirmation letter. Always complete the formal revocation process, even if the agent has already stopped providing services.

Mistake 6: Forgetting to Update for Scope Changes

If you initially appointed an agent for Form 941 only, but later want them to also handle Form 940, you need to file a new Form 2678 with both boxes checked. Some employers assume the agent can simply start filing additional forms, but each form type requires explicit authorization. Keep your appointments current with your actual needs.

Mistake 7: Wrong Mailing Address

Form 2678 uses location-specific addresses that differ from where you mail your actual tax returns. Sending the form to the wrong processing center can delay approval by weeks or months. Double-check the "Where To File" chart in the instructions and use the address that matches your business location.

What Happens After You File

Processing and Approval

Once the IRS receives your Form 2678, it enters a processing queue at the designated service center. The typical processing time is 30 days from receipt, though complex situations or peak filing periods might cause delays. During processing, IRS personnel verify that all required information is present, that signatures are valid, and that the employer's and agent's identification numbers match IRS records.

Approval Letters and Effective Date

If the form is complete and accurate, the IRS will issue approval letters. For most appointments, both the employer and the agent receive separate letters. These letters confirm the appointment and state the effective date—this is the date from which the agent has legal authority to act on behalf of the employer. The agent should not file any returns or make any deposits or payments before this effective date.

Special Handling for Home Care Service Recipients

For home care service recipient agents, the IRS only sends the approval letter to the agent, not to the individual employer. This accommodates situations where the individual may have cognitive impairments or limited ability to manage correspondence.

Agent Filing Procedures

Once approved, the agent must follow specific procedures outlined in Revenue Procedure 2013-39 for employment taxes and Revenue Procedure 84-33 for backup withholding. The agent files returns using the employer's EIN, not their own. When filing aggregate returns (combining multiple employers' taxes), agents must complete and attach Schedule R to Form 941 or Form 940, which allocates the total amounts to each individual employer.

Employer Oversight

The employer's responsibility doesn't end with appointment. Employers should regularly review IRS notices, verify that deposits are being made on time, and confirm that quarterly returns are filed by the deadlines. The IRS holds employers accountable for their agents' failures, so active oversight is essential.

Revocation and Aftermath

If you need to revoke an agent appointment, the same Form 2678 is used. Either party can initiate a revocation with just one signature. The IRS will send confirmation letters to both parties (or just to the agent for home care situations), and the revocation becomes effective on the date in the letter. After revocation, the employer must immediately resume filing its own returns or appoint a new agent. The former agent can no longer access the employer's confidential tax information after the revocation date.

Recordkeeping by Agents

Agents who handle multiple employers should maintain detailed records separating each employer's tax information. Commingling funds or misallocating payments among employers can create serious compliance problems and expose the agent to liability.

FAQs

1. Can I appoint an agent electronically or must I mail a paper form?

2. How long does IRS approval take and what if I need the agent to start immediately?

3. Can my agent appoint a sub-agent or delegate responsibilities to another company?

4. If my agent makes mistakes on tax returns, am I still responsible for penalties and interest?

5. Can I appoint different agents for different types of employment taxes?

6. What's the difference between a Form 2678 agent and a general power of attorney (Form 2848)?

7. If I'm using a certified professional employer organization (CPEO), do I still need Form 2678?

Sources

Sources: All information in this summary comes from official IRS sources, including the Instructions for Form 2678 (December 2024), Form 2678 (December 2024), and the About Form 2678 page on IRS.gov. For the most current information, always consult IRS.gov/Form2678.

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