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U.S. Master™ Payroll Guide, 2009 Edition 
Everything you need to know about payroll, from employers and their obligations, to payroll withholding and tax deposits, to payroll management and administration issues.
Numerous educational sessions were held at the American Payroll Associations's (APA) 25th Annual Congress. Below are some highlights from a few of the sessions.
IRS audits
David M. Young, CPA, Associate Treasurer and Tax Manager Kent State University, and Anita Bartels, Senior Program Analyst, IRS, were the speakers of the “Dealing With an IRS Audit” session.
The likely reasons for an IRS audit are: income tax abnormalities, information return problems, inappropriate behavior by the employer, and random picks. Information return problems occur with Forms 940, W-2, 1099, and 941. Specifically, the IRS compares the W-2s with the 941s, which must both be filed.
According to the speakers, the following should be done during an audit:
White collar exemptions
“White Collar Exemption Regulations” was conducted by Michael O'Toole, Esq., APA's Senior Director of Publications and Government Relations. O'Toole pointed out that human resource managers are exempt under the white collar exemption regulations if they formulate, interpret, or implement employment policies. There is no exemption for clerks who screen job applicants to see if they meet minimum qualifications and then report to managers for a decision. If a human resources manager does initial screening and makes a decision to hire or recommends applicants from a qualified pool, all is considered exempt work. Management consultants are exempt if they study companies and recommend organizational changes.
Another item to note was that the preamble to the new regulations states that employers can deduct from employees' accrued leave banks, require employees to record and track hours, and require employees to work a specified schedule.
Form W-4
O'Toole also gave the seminar on “The Wonderful New World of Form W-4.” O'Toole noted that a new Form W-4 is not needed just because an employee has declared bankruptcy. The wages simply become part of the bankruptcy estate and the estate only gets one exemption. Employees should file a new Form W-4 if some allowances were based on deductions or credits that now belong to the estate or if a higher estate tax rate will necessitate estimated tax payments.
O'Toole also advised employers to watch out for students claiming exemption from withholding. High school and college students are not automatically exempt from withholding, even though their prior year's withholding was totally refunded. Students must meet all the tests for exemptions that other employees have to meet, including the $850 limit on income for dependents.
Also noted was the change in the perjury statement on the form. The statement was expanded in the IRS regulations, to include, among other things, the employee's name, address, marital status, and social security number. Previously, the statement applied only to the number of withholding allowances claimed or a claim of exempt status.
Pennsylvania local taxes
Bruce E. Phipps, CPP, Director of Payroll services for Benchmark Medical Inc. advised attendees at the “Local Income Taxes in Pennsylvania” session to keep an eye on the local income tax collection reform that has been initiated in Pennsylvania. Two bills introduced in the 2005-2006 state legislative session would have reduced the number of tax collectors from 560 to 66 countywide tax collection districts. If the effort progresses there will be uniform withholding, remittance, distribution, and reporting. There will also be uniform rules and forms. This will reduce the burden on business, according to Phipps.
Ohio local taxes
Pat Corturillo, CPP, Payroll Manager, Foseco Metalallurgical Inc., advised employers at the “Local Income Taxes in Ohio” session on how to and how much to withhold. Employers should use the same wage base and number of exemptions they use for withholding state income tax and use the school district withholding tables, unless the school district income tax is based on earned income. Several school districts have enacted an alternative, earned income tax only, tax base. Employers in those districts should withhold at a flat rate equal to the tax rate for the district without adjustments for personal exemptions.
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