Sunday, August 19, 2007

Independent Contracts and Your Business…Are YOU being Audited?!?

The federal government and the IRS is clamping down on businesses that misclassify workers as independent contractors. Of course this is all directed in an effort to close the tax gap (standing at $345 billion). Some of the planned initiatives include:

1. Congress possibly rewriting the rules on work classification
2. Increase federal tax compliance on employment taxes, including a written understanding with all 50 state agencies that administer state employment taxes
3. More Audits using the 20 factor test and audits of S-Corps
4. Increase criminal investigations of businesses that engage in wage schemes

This is just another call for many to get their act together as stated in a previous blog post. For more information regarding this and other issues regarding your business and its workers, be sure to speak to your tax advisor.

Keeping your Business N Synergy

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