To amend the Internal Revenue Code of 1986 to establish procedures relating to the attribution of errors in the case of third party payors of payroll taxes, and for other purposes.

Protection for Employers and Tax Credits: Under Section 1(a), subsection (d), the Secretary is prohibited from delaying the processing of a payroll tax credit or initiating an audit of an employer solely because a third party payor filed an erroneous return based on a certification from another employer. This could prevent businesses from being unfairly targeted or delayed due to the errors of others.

Clear Liability Rules for Third Party Payors: Section 1(a), subsection (b) provides a framework for liability. If a third party payor does not have constructive knowledge of an error in a certification, the employer retains sole responsibility for the liability. This protects the third party payor from being held responsible for mistakes they could not have reasonably known about.

Safe Harbor for Payroll Tax Credits: Section 1(a), subsection (f) provides specific conditions under which a third party payor is deemed not to have constructive knowledge of an error. This applies if the payor accurately reports the credit according to the employer's certification and verifies the aggregate wages paid, providing a clear path for payors to avoid liability when following these steps.

Potential Liability for Third Party Payors with Knowledge of Errors: According to Section 1(a), subsection (b)(1)(B), if a third party payor has constructive knowledge of an error in a certification, they can be held responsible for the portion of the liability related to that specific error.

Record Retention Burdens: Section 1(a), subsection (e) allows the Secretary to require a third party payor to provide any information they possess regarding an employer that the Secretary could otherwise require from the employer. This could create additional administrative requirements for these entities.