SECTION 5. GUIDANCE FOR

CPEOS WITH AN EFFECTIVE DATE OF CERTIFICATION OF JANUARY 1, 2017, THAT RECEIVE NOTICE OF CERTIFICATION AFTER THAT DATE

.01 In general . Rev. Proc. 2016–33, as modified by Notice 2016–49, provides that the effective date of certification for a CPEO applicant that submits a complete and accurate application before October 1, 2016, and is certified, will be January 1, 2017, even if the date of its notice of certification is after January 1, 2017. A CPEO applicant that submitted a complete and accurate application before October 1, 2016, under this special rule should begin keeping track of the information necessary to properly complete a Schedule R (Form 941), Allocation Schedule for Ag- gregate Form 941 Filers (a draft of the new Schedule R (Form 941) that includes CPEO reporting is available at www.irs. gov ) as of January 1, 2017, even if the CPEO applicant has not yet received notice of certification. The IRS anticipates that a CPEO that receives a notice of certification during the first quarter of 2017 providing for an effective date of certification of January 1, 2017, will be able to comply with CPEO employment tax reporting requirements, as described in section 2.06(2) of this revenue procedure, and file Form 941 with an attached Schedule R by the first quarter deadline of April 30, 2017. However, in the event a CPEO receives a notice of certification after the end of the first quarter of 2017 (that is, after March 31, 2017) that provides for an effective date of certification of January 1, 2017, the CPEO may file Form 941 for the first quarter of 2017 without an attached Schedule R, but then must file Form 941–X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, with a properly completed Schedule R for the first quarter by July 31, 2017.

.02 Transition rule for filing Form 14751 . Under § 301.7705–2T(g) and section 2.04(2) of Rev. Proc. 2016–33, a CPEO applicant that is certified under the

special rule described in section 5.01 of this revenue procedure would have 30 days to post a bond that is effective beginning January 1, 2017, (using Form 14751) in the amount required by § 301.7705–2T(g)(2). To comply with section 2.03(3) of this revenue procedure, a CPEO that is certified under the special rule and whose bond amount under § 301.7705–2T(g)(2) increases for the bond period beginning April 1, 2017, would need to increase its bond amount (using Form 14571) for the new bond period by March 1, 2017. If a CPEO that is certified under the special rule receives its notice of certification after March 1, 2017, meeting this March 1 deadline will not be possible. Moreover, whether or not notice of certification is received by the March 1 deadline, obtaining a bond for a three-month period beginning January 1, 2017, and then within a short timeframe increasing that bond amount for a period beginning April 1, 2017, may prove administratively difficult.

Accordingly, Treasury and the IRS are providing transition relief for newly certified CPEOs that are certified with an effective date of January 1, 2017, under the special rule described in section 5.01 of this revenue procedure. Specifically, with respect to both the bond period from January 1, 2017, to March 31, 2017, and the bond period from April 1, 2017, to March 31, 2018, such a CPEO will be required to submit only one properly completed and executed Form 14751 covering both bond periods. The single bond posted using this Form 14751 must have an effective date of January 1, 2017, and cover both bond periods using the same bond amount, which is in the amount required by § 301.7705–2T(g)(2), calculated for the bond period beginning April 1, 2017, and ending March 31, 2018. In addition, the CPEO will have 30 days from the date of its notice of certification to submit this Form 14751, without regard to when the CPEO’s notice of certification is received.