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Are Your Independent Contractors Misclassified? IRS Offers Employers a “Fresh Start” to Reclassify Workers by Jeremy R. Cnudde
Butzel Long - Detroit Office
Sean H. Cook
Butzel Long - Detroit Office
Rebecca S. Davies
Butzel Long - Detroit Office
Terry O. Lang
Butzel Long - Detroit Office
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November 2, 2011
Previously published on November 2011
The Internal Revenue Service (IRS) and the Department of Labor (DOL) have launched a new program to permit employers that have classified workers as independent contractors to switch the classification to employee through a low-cost settlement program. The IRS will allow employers to change past worker classification issues by making a minimal payment and avoid substantial payroll tax obligations for prior years that would be assessed by the IRS under an audit. The IRS hails this as a “Voluntary Classification Settlement Program (VCSP) [that] is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government.” This program reinforces the belief that the IRS would like all workers to be treated as employees to improve tax collection and reduce deductions claimed by schedule C workers.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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