Voluntary Worker Classification Settlement Program through the IRS
No one likes to be audited by the IRS. I have blogged in the past about properly classifying workers. A friend and colleague of mine, Mary Budge, attorney and author of Budge Law Blog, wrote this week about a new program through the IRS. The program is applicable to employers who are currently treating their workers as independent contractors or other non-employees, and want to prospectively treat the workers as employees.
Ms. Budge writes, “If you feel you have erroneously been treating workers as non-employees or as independent contractors, and fear that there may be severe consequences for doing so, the IRS launched a new program that will enable many employers to resolve past worker classification issues by voluntarily reclassifying their workers. So rather than waiting for an IRS audit, this voluntary classification settlement program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations.”
Taxpayers must meet certain qualifications to be able to participate in the IRS’ Voluntary Classification Settlement Program.
It is important for employers to be proactive when it comes to business issues. For example, having workers properly classified as employees or independent contractors, or having employees appropriately categorized as exempt or non-exempt under the FLSA. If employers take a proactive approach to resolving potential workplace issues, the penalties may be reduced. Don’t wait for the IRS or the Department of Labor to knock on your door, and tell you the things you are doing wrong. Talk to your attorney or accountant and make sure you are doing things right.
