For the last two years, McAfee & Taft has been warning employers of the consequences of misclassifying workers as independent contractors instead of employees.
To support its belief that worker misclassification is an area of widespread abuse by some employers to avoid paying income and employment taxes and other benefits, the Internal Revenue Service and state agencies have strengthened their investigation and enforcement efforts. In fact, just last week the IRS, U.S. Department of Labor and state authorities announced an information sharing partnership to help detect worker misclassification.
The IRS, however, also recognizes the legal uncertainty and potentially crippling consequences of misclassification. Two days after announcing its information sharing partnership, the IRS announced a program called the Voluntary Classification Settlement Program (VCSP), which may provide relief to some businesses.
Article authored by McAfee & Taft Attorney: Keith Peters.
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