Treasury's Assistant Secretary for Management chairs its Executive Steering Committee. The federal tax, state tax, and unemployment insurance systems depend on accurate reporting by employers. All employers must withhold taxes from their employees' paychecks, keep specific wage-related records, report payroll information, and make periodic deposits of withheld money to a variety of federal and state agencies. To do the job right, employers are required to understand and keep abreast of a bewildering array of wage and unemployment insurance rules, regulations, tax forms, filing procedures, and payment requirements. Complex in a single state because federal and state requirements differ, the task is really daunting for multi-state employers who must keep current with federal rules and with perhaps as many as 50 different state wage and unemployment insurance requirements.
Every employer also needs to know local, municipal, and territorial requirements.
Small and start-up companies often go to outside payroll services because they cannot handle the task internally. Government revenue agencies also struggle with the current system. Federal, state, and local governments often lack adequate resources to process the mountains of paper the system generates, issue timely regulations implementing legislative changes, provide customer assistance, and effectively manage compliance programs. Although many federal and state agencies require almost the same information, little has been done to share data. There have been both technical and legal barriers.