Instructions to Fo Instructions to Form 8973

Instructions for Form 8973

Department of the Treasury
Internal Revenue Service

(Rev. December 2018)

Certified Professional Employer Organization/Customer Reporting Agreement
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Form 8973 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form8973.

General Instructions
Purpose of Form 8973

Certified Professional Employer Organizations (CPEOs) use
Form 8973 to notify the IRS that a service contract between a
CPEO and a customer has started or ended, and to correct a
previously filed Form 8973. If Form 8973 is being used to
notify the IRS that a service contract has started, CPEOs also
use Form 8973 to identify the forms that the CPEO will file
reporting wages or compensation paid to employees
performing services for the customer and to allow the CPEO
to consent to the disclosure of tax information to the
customer.
For purposes of this form, a service contract is either a
CPEO contract described under section 7705(e)(2) or a
service agreement described under Regulations section
31.3504-2(b)(2), and a customer is any person who has
entered into such a service contract with the CPEO. For more
information on CPEO contracts and service agreements, see
the line 10 instructions, later.
For more information about the CPEO program, including
frequently asked questions, go to IRS.gov/CPEO.
If the customer filed Form 2678, Employer/Payer

TIP Appointment of Agent, appointing the CPEO as an

own Form 8973 to notify the IRS that its service contract with
the CPEO has ended.

When To File

Generally, a CPEO must file Form 8973 within 30 days of
starting or ending a service contract with a customer.
However, a newly certified CPEO has 6 months from the date
of its notice of certification to submit Forms 8973 with respect
to the commencement of any service contracts with existing
customers (see section 2.06(1) of Rev. Proc. 2017-14,
2017-3 I.R.B. 426, available at IRS.gov/irb/
2017-03_IRB#RP-2017-14).
In addition, before the end of the last year or period listed
on the most recent prior CPEO Consent to Disclosure of Tax
Information, the CPEO must renew the consent if it is still
under a service contract with the customer named on the
consent. For more information on renewing the consent, see
Renewing the CPEO Consent to Disclosure of Tax
Information, later.

Where To File

Mail to the following address.
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0089

Completing and Filing Form 8973
Make entries on Form 8973 as follows to enable accurate
scanning and processing.

• Use 12-point Courier font (if possible) for all entries if
you're typing or using a computer to complete your form.
Portable Document Format (PDF) forms on IRS.gov have
fillable fields with acceptable font specifications.
• In Part 1, enter the date as “MM/DD/YYYY.” For example,
if a service contract started on January 1, 2019, enter
“01/01/2019.”

authorized agent of the customer under Regulations
section 31.3504-1, then the relationship between the CPEO
and the customer isn’t subject to a CPEO contract or a
service agreement under Regulations section 31.3504-2(b)
(2). In this case, the CPEO shouldn’t file Form 8973 for the
customer.

Specific Instructions

Substitute Forms

Part 1: Why Are You Filing This Form?

The IRS accepts quality substitute tax forms that are
consistent with the official forms and have no adverse impact
on our processing. The official Form 8973 is the standard for
substitute forms. Because a substitute form is a variation
from the official form, you should know the requirements of
the official form for the year of use before you create a
substitute version. For details on the requirements for
substitute forms, see Pub. 1167.

Who Must File

The CPEO must file Form 8973 to notify the IRS that a
service contract started between a customer reported in Part
2 and a CPEO reported in Part 3 or to correct a previously
filed Form 8973. The CPEO is required to file Form 8973 to
notify the IRS that a service contract has ended. In addition,
though not required, the customer may also separately file its

Nov 27, 2018

Check a box to tell the IRS if you’re filing Form 8973 because
a service contract started between the customer reported in
Part 2 and the CPEO reported in Part 3, a service contract
ended between the customer reported in Part 2 and the
CPEO reported in Part 3, or you're correcting a previously
filed Form 8973. You must enter the date (formatted as
MM/DD/YYYY) that the service contract started or ended.

Service contract started. In Part 1, the service contract
date is the date the CPEO and customer entered into either a
CPEO contract described under section 7705(e)(2) or a
service agreement described under Regulation section
31.3504-2(b)(2). If line 10 in Part 4 is checked “Yes” (that is,
the CPEO and customer are subject to a CPEO contract),
then the service contract start date entered in Part 1 must be
the date the CPEO and customer entered into the CPEO
contract, even if the CPEO and customer had an existing

Cat. No. 68908X

contractual relationship prior to the CPEO’s certification. The
service contract start date of a CPEO contract under section
7705(e)(2) can’t precede the CPEO's certification effective
date.
When reporting that a service contract has started, either
the customer or the CPEO can complete Parts 1 and 2. The
CPEO must complete Parts 3 and 4 and provide the
customer a copy of these instructions before the customer
signs Part 5. The CPEO must also complete Part 6 and the
CPEO Consent to Disclosure of Tax Information before
sending Form 8973 to the IRS. The CPEO must provide the
customer with a copy of the fully completed and signed Form
8973.

customer may also apply for an EIN by faxing or mailing
Form SS-4 to the IRS. If the principal business was created
or organized outside of the United States or U.S. territories,
the customer may also apply for an EIN by calling
267-941-1099 (toll call).

!

Don’t use a social security number (SSN) in place of
an EIN.

CAUTION

Line 2. Customer’s Name

Enter the customer’s name (not the trade name). The name
on line 2 should be the same as the legal name the customer
used when it applied for its EIN, unless the customer notified
the IRS of a name change.

Service contract ended. The CPEO is required to file Form
8973 to notify the IRS that a service contract has ended. Only
the CPEO’s signature is required to notify the IRS that a
service contract has ended. In addition, though not required,
the customer may also separately file its own Form 8973 to
notify the IRS that its service contract with the CPEO has
ended. If a customer separately files its own Form 8973 to
notify the IRS that its service contract with the CPEO has
ended, only the customer’s signature is required on that
Form 8973. In both cases, Parts 1, 2, and 3 must be
completed (although Part 2, line 5, should be blank). It isn’t
necessary in either case to complete Part 4 or the CPEO
Consent to Disclosure of Tax Information.

Line 3. Customer’s Trade Name

Enter the customer’s trade name (if any). The trade name on
line 3 should be the same as the trade name the customer
used when it applied for its EIN.

Line 4. Address

Enter the customer’s address.

Line 5. Identify Forms That the CPEO Will File
Reporting Wages or Compensation Paid to
Employees Performing Services for the
Customer

Correcting a previously filed Form 8973. Submit Form
8973 with the correct information in accordance with these
instructions.

Check the boxes for all forms that the CPEO will file reporting
wages or compensation paid to employees performing
services for the customer. If the CPEO is reporting only some
of the wages or compensation paid to employees performing
services for the customer, check the boxes under CPEO
reports some wages/compensation paid to employees.

Before the end of the last year or period listed on the

TIP most recent prior CPEO Consent to Disclosure of Tax

Information, the CPEO must renew the consent if it is
still under a service contract with the customer named on the
consent. See Renewing the CPEO Consent to Disclosure of
Tax Information, later.

For example, if the CPEO reports wages or compensation
paid by the CPEO to employees performing services for the
customer pursuant to a service contract and the customer
separately reports wages or compensation (including, for
example, bonuses, stock options, and taxable fringe
benefits) paid by the customer to the same employees, the
CPEO is reporting some, but not all, of the wages or
compensation paid to employees performing services for the
customer and should check the boxes under CPEO reports
some wages/compensation paid to employees.

Transfer or assignment of a service contract. If a CPEO
(the transferor) transfers or assigns a service contract that
was previously reported as “started” on Form 8973 to a
subsidiary or affiliate (the transferee), the transferor must file
a Form 8973 to tell the IRS that the service contract has
ended between the customer reported in Part 2 and the
CPEO reported in Part 3. Then, if the transferee is a CPEO,
within 30 days of the transfer, the transferee must file Form
8973 to tell the IRS that a service contract has started
between the customer reported in Part 2 and the CPEO
(transferee) reported in Part 3.

Similarly, if a CPEO and a customer enter into a service
contract that covers some, but not all, of the employees
performing services for the customer, so that the customer
reports wages or compensation paid to the employees not
covered by the service contract, the CPEO is reporting some,
but not all, of the wages or compensation paid to employees
performing services for the customer and should check the
boxes under CPEO reports some wages/compensation paid
to employees.

Part 2: Customer Information

Line 1. Customer’s Employer Identification
Number (EIN)

Enter the customer’s EIN. The EIN that you enter on line 1
must match the EIN that the IRS assigned to the customer. If
the customer previously filed employment tax returns (for
example, Form 941, Employer’s QUARTERLY Federal Tax
Return), the EIN on line 1 also must match the EIN that the
customer used on its employment tax returns. The
customer’s business should have only one EIN. If the
customer has more than one EIN and isn’t sure which one to
use, the customer can write to the IRS office where it files its
employment tax returns (use the Without a payment address
in the instructions for the employment tax returns) or call the
IRS at 800-829-4933. If the customer doesn’t have an EIN, it
may apply for one online by visiting IRS.gov/EIN. The

For details on wages and compensation, see Pub. 15-A,
Employer’s Supplemental Tax Guide, and the General
Instructions for Forms W-2 and W-3.

Part 3: CPEO Information

Line 6. CPEO’s EIN

Enter the CPEO’s EIN. The EIN that you enter on line 6 must
be the same as the EIN that you’ll use when you file
employment tax returns (for example, Form 941 and its
related Schedule R (Form 941), Allocation Schedule for
Aggregate Form 941 Filers).

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Instructions for Form 8973 (Rev. 12-2018)

• Pays wages or RRTA compensation to the individual(s)
performing services for the customer pursuant to the
agreement; and
• Assumes responsibility to collect, report, and pay, or
assumes liability for, employment taxes on the wages or
RRTA compensation paid by the CPEO to the individual(s)
performing services for the customer pursuant to the
agreement.

Line 7. CPEO’s Name

Enter the CPEO’s name (not the trade name). The name that
you enter on line 7 must be the same as the name that you’ll
use when you file employment tax returns (for example, Form
941 and its related Schedule R (Form 941)).

Line 8. CPEO’s Trade Name

Enter the CPEO’s trade name (if any). The name that you
enter on line 8 must be the same as the trade name that
you’ll use when you file employment tax returns (for example,
Form 941).

Line 11. Is the Customer Reported in Part 2 a
Provider of Employment-Related Services?

The customer is a provider of employment-related services if
it provides:
• Employment tax administration,
• Payroll services, or
• Other employment-related compliance services to clients.

Line 9. Address

Enter the physical address that the CPEO provided on its
application for certification as a CPEO (if this address has
changed and the CPEO has provided an updated address to
the IRS, enter the updated address). The address must be
an address in the United States.

Other employment-related compliance services may
include, but aren’t limited to, collecting, reporting, and paying
employment taxes for wages or compensation paid to
individuals performing services for the clients.

Part 4: Customer Relationship
Information

Line 12. Is the Customer Reported in Part 2 a
Related Party of the CPEO?

Answer “Yes” or “No” to the questions on lines 10–13.
However, if you answer “No” to question 10, you may skip
lines 11–13.

A CPEO won’t be treated as the employer of an individual
performing services for the customer for purposes of federal
employment taxes if the customer is a related party, even if
the CPEO’s relationship with the customer is subject to a
CPEO contract. The customer is a related party if it has a
relationship with the CPEO as described in section 267(b) or
section 707(b), but substituting “10 percent” for any reference
to “50 percent.”

Line 10. Is the CPEO’s Relationship With the
Customer Reported in Part 2 Subject to a
Contract Described Under Section 7705(e)(2)?

The CPEO’s relationship with the customer is subject to a
contract described under section 7705(e)(2) (also called a
CPEO contract) if the contract is in writing and, with respect
to an individual providing services for the customer pursuant
to the contract, provides that the CPEO will assume
responsibility for:
• Payment of wages or Railroad Retirement Tax Act (RRTA)
compensation to the individual(s) performing services for the
customer, without regard to the receipt or adequacy of
payment from the customer;
• Reporting, withholding, and paying any applicable federal
employment taxes on the wages or RRTA compensation
paid to the individual(s) performing services for the customer,
without regard to the receipt or adequacy of payment from
the customer;
• Providing employee benefits that the contract may require
the CPEO to provide, without regard to the receipt or
adequacy of payment from the customer; and
• Recruiting, hiring, and firing individuals performing
services for the customer (in addition to the customer’s
responsibility for recruiting, hiring, and firing).

Line 13. Does the CPEO Apply the Exemptions,
Exclusions, Definitions, and Other Rules Which
Are Based on Type of Employer Under Sections
3511(a)(2) and 3511(c)(2) to the Customer
Reported in Part 2?

For purposes of federal employment taxes, the exemptions,
exclusions, definitions, and other rules that are based on type
of employer under sections 3511(a)(2) and 3511(c)(2) are
presumed to be based on the customer and, in most cases,
“Yes” will be checked for this line. However, check the “No”
box in the rare case that another entity is the common law
employer of individuals performing services for the customer,
and the exemptions, exclusions, definitions, and other rules
that are based on type of employer will be based on that
entity.

Part 5: Customer Signature

Part 5 must be signed by a person who has the authority to
execute Form 8973 for the customer listed in Part 2. By
signing Part 5, you acknowledge that Form 8973, Parts 1, 2,
and 4 are, to the best of your knowledge and belief, true,
correct, and complete.

Additionally, the CPEO must agree in the contract to
maintain employee records for the individual(s) performing
services for the customer and to be treated as a CPEO for
federal employment tax purposes in relation to the
individual(s) performing services for the customer.

Customers can visit IRS.gov/CPEO for more

If the CPEO’s relationship with the customer isn’t subject
to a CPEO contract (“No” is checked on line 10), Form 8973
must still be filed if the CPEO’s relationship with the customer
reported in Part 2 is subject to a service agreement
described under Regulations section 31.3504-2(b)(2). A
service agreement under Regulations section 31.3504-2(b)
(2) means an agreement that provides that the CPEO:
• Asserts it is the employer (or “co-employer”) for the
individual(s) performing services for the customer pursuant to
the agreement;
Instructions for Form 8973 (Rev. 12-2018)

TIP information about the CPEO program and to access

the list of organizations (updated quarterly) that are
certified by the IRS as CPEOs.

Part 6: CPEO Signature

Part 6 must be signed by a person who has the authority to
execute Form 8973 for the CPEO listed in Part 3. By signing
Part 6, you acknowledge, under penalties of perjury, that
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Form 8973, Parts 1–4 are, to the best of your knowledge and
belief, true, correct, and complete.

only need to send the renewed consent (page 3 of Form
8973). Don’t send a completed Form 8973. Mail the renewed
consent to the address provided under Where To File,
earlier.

Only the CPEO’s signature is required if you're telling

TIP the IRS that a service contract has ended.

You must enter the customer’s name and customer’s
EIN that were included in Part 2 of the original or
CAUTION corrected Form 8973 that was filed to report the start
of the service contract.

!

CPEO Consent to Disclosure of Tax
Information

When filing Form 8973 to report the start of a service
contract, the CPEO must complete the CPEO Consent to
Disclosure of Tax Information.

Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on Form 8973 to carry out the Internal
Revenue laws of the United States. Our authority to request
the information is Internal Revenue Code sections 3511 and
7705 and the regulations thereunder. We use this information
to record the start or end of a service contract between a
CPEO and the customer. A customer isn’t required to enter
into a service agreement with a CPEO. However, if a
customer chooses to enter into a service contract with a
CPEO, both the customer and the CPEO are required to
provide the information requested. Section 6109 requires the
customer and the CPEO to provide their identification
numbers. If the customer or CPEO fails to provide the
information in a timely manner, or provides false or fraudulent
information, the customer and the CPEO may be subject to
penalties. Additionally, if the CPEO fails to provide this
information in a timely manner, or provides false or fraudulent
information, the IRS may revoke or suspend its certification.

By signing, dating, and entering the CPEO’s EIN at the
bottom of the consent, you allow the IRS, to the extent
necessary to carry out the purposes of the CPEO program, to
disclose information to the customer named on the consent
from the CPEO’s employment tax returns (for example,
Forms 940 and 941) as it relates to the customer named on
the consent. This consent also covers the disclosure of any
information regarding the CPEO’s obligations to report,
deposit, and pay federal employment taxes for the customer
named on the consent. You also consent to the disclosure of
information regarding the CPEO’s certification, regardless of
year. You must enter the following information on the
consent.
Customer’s name. Enter the customer’s name as shown in
Part 2.

Neither the CPEO nor the customer is required to provide
the information requested on a form that is subject to the
Paperwork Reduction Act unless the form displays a valid
OMB control number. Books or records relating to a form or
its instructions must be retained as long as their contents
may become material in the administration of any Internal
Revenue law.

Customer’s EIN. Enter the customer’s EIN as shown in Part
2.
Tax form number. Enter the tax form the CPEO files that
will include information related to the customer named on the
consent. Enter only one tax form on each line.

!

Don’t use a general reference such as “All tax forms”
in place of the actual tax form number.

Generally, tax returns and return information are
confidential, as required by section 6103. However, section
6103 allows or requires us to disclose this information to
others as described in the Code. We may disclose your tax
information to the Department of Justice for civil and criminal
litigation, and to cities, states, the District of Columbia, and
U.S. commonwealths and possessions to administer their tax
laws. We may also disclose this information to other
countries under a tax treaty, to federal and state agencies to
enforce federal nontax criminal laws, or to federal law
enforcement and intelligence agencies to combat terrorism.

CAUTION

Year(s) or period(s). Enter the year(s) or period(s) for
which you consent to the disclosure of tax information. You
may not list more than 3 years or 12 quarters. However, we
recommend that you list exactly 3 years or 12 quarters
because you must renew the consent, if you’re still under a
service contract with the customer named on the consent,
when the last year or period listed on the consent ends.
Example. You may list “2019–2021” or “2019, 2020,
2021” for returns filed annually. For returns filed quarterly,
you may list “2nd Qtr. 2019–1st Qtr. 2022,” or you can list the
years (as shown earlier) if those years include all four
quarters.

!

CAUTION

The time needed to complete and file Form 8973 will vary
depending on individual circumstances. The estimated
average time is:

Don’t use a general reference such as “All years” or
“All periods” in place of the actual year(s) or
period(s).

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . .

Signature. Sign and date the bottom of the consent. You
also must enter the CPEO’s EIN and name, and print your
name and title.

15 min.
1 hr.
15 min.

If you have comments concerning the accuracy of these
time estimates or suggestions for making Form 8973 simpler,
we would be happy to hear from you. You can send us
comments from IRS.gov/FormComments. Or you can write to
the Internal Revenue Service, Tax Forms and Publications
Division, 1111 Constitution Ave. NW, IR-6526, Washington,
DC 20224. Don't send Form 8973 to this address. Instead,
see Where To File, earlier.

Renewing the CPEO Consent to Disclosure of
Tax Information

If you’re still under a service contract with the customer
named on the consent before the end of the last year or
period listed on the most recent prior consent, you must
renew the consent by sending a new consent to the IRS. The
renewed consent can cover an additional 3 years or 12
quarters. For details, see Year(s) or period(s) above. You
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Instructions for Form 8973 (Rev. 12-2018)