Hunting SeasonFeds try to protect the little guy from payroll tax predators.

You hire a payroll firm to take care of paying employment taxesto the IRS. You send them the money, and they pass it on to thefeds. Right? Well, not always. Therein lies the genesis of Sen.Olympia Snowe's (R-ME) amendment to the Tax Administration GoodGovernment Act (H.R. 1528), which passed the Senate in May. Theamendment gives the IRS tools to go after payroll/accounting firmsthat steal a client's employment tax payments, and protectionto firms that hire those rogue firms.

In the first and, so far, last instance of the IRS and theJustice Department taking a payroll company to court, a federalcourt in Salt Lake City issued a preliminary injunction in April2003 appointing a receiver to shut down a company called ProvidentManagement Group. Provident allegedly failed to file at least 282federal employment tax returns for their customers, and failed tomake more than $2 million in required employment tax deposits ontheir behalf.