The system ensures the timely payment of taxes due a taxing authority while protecting
the solvency of an independent service provider. The contracting entity retains
a third-party escrow manager who oversees payments made by the contracting entity
to an independent service provider. The third-party escrow manager estimates tax
liability owed by the independent service provider to a tax authority based upon
data provided to the third-party escrow manager by the independent service provider.
The third-party escrow manager deposits a portion of monies owed to the independent
service provider by the contracting entity for services provided in an escrow account.
The escrow account is used by the independent contractor to pay monies owed to
the taxing authority in a timely manner when due.
