The IRS unveiled a program that allows taxpayers to voluntarily reclassify independent contractors as employees and pay significantly reduced prior employment taxes, with no penalties or interest.
The DOL and the IRS agreed to share information and coordinate law enforcement “to end the business practice of misclassifying employees in order to avoid providing employment protections.”
Worker classification issues have become a major tax administration focus in our nation’s capital over the past few months.
Employers may reclassify independent contractors as employees and limit the resulting federal payroll taxes for their most recent tax year, plus avoid related penalties and interest for prior years, under an IRS program announced September 21.
The owners of a company who had delegated payroll functions to a separate payroll company they owned but did not operate were liable for trust fund recovery penalties because they were responsible persons both before and after the withholding taxes that were the basis of the penalties accrued.
This item provides an overview of the factors examined by the IRS and offers insight into how to better secure independent contractor status.
The IRS posted a new version of Form 941, Employer’s Quarterly Federal Tax Return, and its instructions for claiming the special payroll tax exemption that applies to new workers hired in 2010.
After the Service notified A that it had underpaid its payroll taxes, A investigated and discovered that H, a company A hired to service its payroll accounting, had misappropriated tax funds collected from A. Reliance A taxpayer’s reliance on a third party to fulfill its tax obligations does not relieve