I placed the insured with Applied (oops) back in 2003. After several months of problems with Applied, we were able to finally get State Fund to accept them (this was when SCIF was doing their best to not accept any new biz).
This week, I received a call from an enraged insured who has received a demand for 940 & 941 filings for part of the period that they were with Applied. The insured explained to the IRS that they technically had no employees at the time (as they were on Applied's payroll), and the IRS was unwilling to accept this as an answer.
The insured contacted Applied, and was provided a copy of IRS form 2678 (Employer Appointment of Agent) that was completed previously, and the insured was told to provide this form to the IRS.
The insured did so, and the IRS informed the insured that this was not acceptable, and that the insured was on the hook for about $50K in payroll taxes for the period when they were with Applied. The insured has made attempts to obtain help from Applied to no avail (big surprise).
If anyone has any input on how to help this client, PLEASE let me know.
I have had this account for over 5 years, and they generate about $15K in commission annually. The insured has made it clear that if I do not come up with a solution, I'm fired. After all, I'm the one who placed them with Applied.
To all of the PEO pushers on the board who have inquired as to why agents and brokers do not like using PEO's, here's a good example.
