Taxpayer was the employer; PEO didn’t control payment of wages

In Chief Counsel Advice (CCA), the IRS held that, where a taxpayer contracted with a professional employer organization (PEO) to remit the taxpayer’s employment taxes and the PEO failed to remit those taxes, the taxpayer was liable for the taxes. The CCA rejected the taxpayer’s arguments that a common law employer isn’t an employer for federal income tax withholding purposes if he doesn’t control the payment of wages and that Sec. 530 of the Revenue Act of 1978 provided him relief from that liability.