SECTION 3. SUITABILITY AND TAXCOMPLIANCE CHECK

A CPEO applicant will be required to identify its related entities, precursor entities, and responsible individuals as part of its online application for certification. The IRS will investigate the accuracy of statements and representations made by a CPEO applicant and its responsible individuals in the CPEO applicant’s online application by conducting background checks of the CPEO applicant, any related entities or precursor entities, ³ and responsible individuals. These background checks may include checks on tax compliance, criminal background, professional experience, credit history, professional sanctions, and other relevant facts. By submitting an application, a CPEO applicant and its responsible individuals agree

to provide the IRS with additional information the IRS may request to facilitate its background checks (see section 4.03). A CPEO applicant and each of its responsible individuals must authorize the IRS to conduct required background checks and to investigate the accuracy of statements and submissions, including waiving confidentiality and privilege in situations in which the IRS is otherwise unable to obtain information or would otherwise be prevented from obtaining or confirming information necessary to evaluate a CPEO applicant’s qualification for certification from relevant third parties (such as former employers) because of the existence of confidentiality, non-disclosure, or similar agreements. Failure to provide such information or take such action may result in denial of certification.