The IRS has anounced that it will be increasing the number of audits this year. It is focusing on small businesses (1099) and Proper worker reclassification. Almost all business audits also include employment tax issues. In particular, the IRS is interested in worker status. The IRS understands that businesses have an economic incentive to misclassify workers as independent contractors rather than employees. It costs about 30% less for a business to employ an independent contractor than an employee. The IRS thinks there is significant noncompliance in worker classification and will continue to focus its field examination resources in this area.
Re: IRS said cable guy Employee not Contractor WE
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