November 01, 2011

New Government Crackdown On Independent Contractors Coincides with IRS Offer to Come Clean

The IRS has launched a new program that will enable many employers to resolve past worker classification issues at a relatively low tax cost by voluntarily reclassifying their workers.

This new program offers employers an opportunity to come into compliance by making a payment covering past payroll tax obligations.

This IRS "Fresh Start" initiative coincides with another new government Department of Labor program to crack down on employers who misclassify employees as independent contractors (see right-hand box for more information).

The new IRS Voluntary Classification Settlement Program "is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government," according to the IRS.

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