Roadmap to IRS Certification

Prior to Application

• Review application requirements.
• Choose an entity (or entities) to certify.
• Identify a person to be a CPEO applicant. 
• Determine who the responsible individuals are in your entity.
• Responsible individuals must complete an Individual Identity Verification. Verified individuals will be assigned an Individual Number (INDV) for use in CPEO applications.
• Notify responsible individuals and educate them about their requirements under the SBEA (the background check, which includes fingerprinting and also electronic submission of biographical history through an electronic “Responsible Individual Personal Attestation,” or RIPA form 14737-A.
• Determine whether entity meets working capital requirements for entity to be certified.
• Prepare to pay $1,000 user fee for each application. 
• Choose, hire and educate a CPA on additional requirements, such as attestation and other financial statement requirements. Review Notice 2016-49, § IV to determine if you are entitled to transition relief.  
• Ensure that your company’s most recent audit for the fiscal year completed prior to application is presented fairly and in accordance with generally accepted accounting principles (GAAP), shows positive working capital, and is based on accrual accounting.
• If your company has not been audited, obtain an audit.
• If you are not doing so already, obtain quarterly attestation (from the CPA) for the most recently completed fiscal quarter prior to application.
• Obtain assertion (proper federal tax withheld and deposited) and working capital statement (positive working capital for the quarter, or if not, an explanation) for signature under penalties of perjury by responsible individual of the CPEO applicant. (These are submitted quarterly).
• Determine the bond amount for a surety bond (5% of your federal employment tax liability, from a minimum of $50,000 to $1,000,000).
• Choose and hire a T-list surety vendor to provide a surety letter, signed by both the qualified surety and the CPEO applicant, re: bonding.  Here is a link to qualified surety companies.
• Notify responsible individuals (Owner, CPEO applicant, Board of Directors, etc.) to complete background check forms online, when required.
• Have responsible individuals review requirements for fingerprinting.  Here is a link to FD-258, fingerprint card sample.
• Request fingerprint cards from IRS and complete fingerprinting process. Cards can be requested by emailing sbse.able.cpeo@irs.gov and putting CPEO FINGERPRINT in the subject line.
• Identify precursor entity or entities. Gather requisite documents.
• Identify related entities, including any provider of employment-related services.
• Determine if the entity seeking certification is in a controlled group.
• Prepare your software for tracking that will be required for CPEO.

After Applying to be a Certified PEO

• Timely submit quarterly financial information, including the working capital verification.  This is ongoing from the date of application for certification. This includes Schedule R (Form 941)
• Keep work history on-hand, in case it is requested.
• Keep list of third-party references on-hand, in case it is requested.

Upon Notice of Certification

• 1. Timely submit quarterly financial information, including the working capital verification.  This is ongoing from the date of application for certification. This includes Schedule R (Form 941)
• Keep work history on-hand, in case it is requested.
• Keep list of third-party references on-hand, in case it is requested.