Lobbying Disclosure Act of 1995 (Section 5) - All Filers Are Required to Complete This Page

9. Check if this filing amends a previously filed version of this report

LOBBYING ACTIVITY. Select as many codes as necessary to reflect the general issue areas in which the registrant engaged in lobbying on behalf of the client during the reporting period. Using a separate page for each code, provide information as requested. Add additional page(s) as needed.

15. General issue area code TAX

16. Specific lobbying issues

NAPEO is asking Congress to amend the R&D tax credit to clarify that liability for incorrectly or falsely taking this credit rests with the client of a PEO. In addition, NAPEO has asked the Dept. of Treasury and the IRS to ensure that enforcement against incorrect or false claims of the R&D tax credit focuses on the entity that claimed the credit.

NAPEO continues to ask the IRS to simplify the process of filing the ERTC for PEO small business clients, to make these processes electronic where possible, and to set up additional procedures to help PEOs track their Form 941 tax filings as well as the Form 941-X filings made on behalf of a PEO small business client.

PEO client deferral of payroll taxes/repayment of deferred taxes: Section 2302 of the CARES Act allowed employers to defer the deposit and payment of the employer's share of Social Security taxes for the period of March 27, 2020, through December 31, 2020. Employers must pay 50% of the deferred amount by December 31, 2021, and the remaining portion by December 31, 2022, to avoid penalties and interest. Importantly, the CARES Act provides that, if an employer directs a PEO to defer the payment of the employers share of Social Security taxes during the deferral period, then such employer shall be solely liable for the payment of deferred amounts by the applicable due dates.

The IRS has may not have the resources to timely match all repayments of deferred amounts against the amount of the deferral liability at the client employer level as reported on the Schedule R. As a result of this limitation, the IRS is planning to rely on the PEO to help reconcile repayments and to assist the IRS in eventually transferring what has initially been recorded by the IRS as a PEO tax liability to the appropriate client employers accounts. This policy has raised a variety of concerns for the PEO industry, including -

* PEOs generally lack information regarding (1) client employers that made repayments outside of the PEO relationship, and the amount of such payment, and (2) client employers that failed to repay a deferred amount when due.

* Many employers (PEO clients) whose deferrals were reported by a PEO on Schedule R may no longer be a client of that PEO, and some may have gone out of business. Others may have entered a service contract with a different PEO. Once a PEO contract is terminated, the former client employer is much less likely to provide their deferred amount to the PEO for payment to the IRS or even to inform the PEO that the employer submitted payment itself directly to the IRS.

NAPEO is working with the IRS to address these concerns and address the problems this approach raises.

17. House(s) of Congress and Federal agencies Check if None

Treasury - Dept of, U.S. SENATE, U.S. HOUSE OF REPRESENTATIVES

18. Name of each individual who acted as a lobbyist in this issue area

19. Interest of each foreign entity in the specific issues listed on line 16 above Check if None

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LOBBYING ACTIVITY. Select as many codes as necessary to reflect the general issue areas in which the registrant engaged in lobbying on behalf of the client during the reporting period. Using a separate page for each code, provide information as requested. Add additional page(s) as needed.

15. General issue area code LBR

16. Specific lobbying issues

Form EEO-1: The Equal Employment Opportunity Commission changed the filing process for PEO clients that are required to file a Form EE0-1 (businesses with 100 or more employees; federal contractors with 50 or more employees). The announced changes were unexpected, and the time to comply with the new filing requirements was considered inadequate by many NAPEO members. NAPEO asked the EEOC to provide more detail on the filing requirements and ask the agency to delay the filing deadline fore up to a year so PEOs could convert their electronic filing systems to the new processes.

17. House(s) of Congress and Federal agencies Check if None

Equal Employment Opportunity Commission (EEOC)

18. Name of each individual who acted as a lobbyist in this issue area

19. Interest of each foreign entity in the specific issues listed on line 16 above Check if None

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Information Update Page - Complete ONLY where registration information has changed.

20. Client new address

21. Client new principal place of business (if different than line 20)

22. New General description of client’s business or activities

LOBBYIST UPDATE

23. Name of each previously reported individual who is no longer expected to act as a lobbyist for the client

ISSUE UPDATE

24. General lobbying issue that no longer pertains

AFFILIATED ORGANIZATIONS

25. Add the following affiliated organization(s)

Internet Address:

26. Name of each previously reported organization that is no longer affiliated with the registrant or client

FOREIGN ENTITIES

27. Add the following foreign entities:

28. Name of each previously reported foreign entity that no longer owns, or controls, or is affiliated with the registrant, client or affiliated organization

CONVICTIONS DISCLOSURE

29. Have any of the lobbyists listed on this report been convicted in a Federal or State Court of an offense involving bribery, extortion, embezzlement, an illegal kickback, tax evasion, fraud, a conflict of interest, making a false statement, perjury, or money laundering?
No Yes