H.R. 3223 — 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.

This section adds a new IRC §3513 to establish rules limiting the liability of third-party payors of payroll taxes (i.e., fiduciaries, agents under IRC §3504, professional employer organizations, or certified professional employer organizations) for errors in employer certifications on which they rely, absent constructive knowledge of such errors. Specifically, the section (1) permits third-party payors to rely on employer certifications (including representations or attestations) for payroll tax requirements; (2) assigns sole liability for errors to the employer if the third-party payor lacks constructive knowledge, or splits liability if the third-party payor has such knowledge (employer fully responsible, third-party only for the known portion); (3) prohibits the Secretary of the Treasury from delaying processing of or auditing other employers' payroll tax credits solely due to a third-party payor's erroneous filing based on another employer's certification; (4) authorizes the Secretary to require third-party payors to provide employer-related records; and (5) deems a third-party payor to lack constructive knowledge of an error in a payroll tax credit certification if the employer certified entitlement, the credit was accurately reported per the certification, and aggregate wages were verified prior to claiming. (Thus, third-party payors gain a safe harbor for reasonable reliance on employer certifications, shifting primary payroll tax liability—including amounts due, interest, and penalties—to employers.) The provision applies to audits, examinations, and assessments initiated or made after enactment.