Report: Companies Failing at Worker Classification


Report: Companies Failing at Worker Classification

by Joseph M. Donegan on August 14, 2013

A large number of small, mid-market, and large companies nationwide are failing to comply with the Internal Revenue Service rules that govern worker classification status, a new report reveals.

The Treasury Inspector General for Tax Administration, looking to ensure tax compliance, released new findings that show many companies who continue to misclassify employees as independent contractors. This malpractice then leaves them open to audits, penalties, and fines. The agency came to this conclusion after investigating an SS-8 program, which allows workers and employers to request a determination letter from the IRS saying whether a worker should be classified as an employee or independent contractor.

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