IRS has extra relief for
businesses that misclassified workers as contractors. The IRS has
announced that more businesses can voluntarily fix errors and pay a low
penalty. Even if you are being audited you can qualify for this program, as long as
the exam isn’t on payroll taxes.
To be eligible you must have
consistently treated the workers in question as contractors and must have given
them 1099s for the past three years. The business must agree to treat the
workers as employees for future tax periods.
The penalty is only 1.028% of
pay up to the FICA wage base (around $106,000) and 0.324% of pay over the
cap. Businesses use Form 8952 to sign up.
Let us know if you would like
more information.
