US Treasury SS-8 Determination of Worker Status for Purposes of Federal Employment Tax

In my dealings with the US Treasury Department regarding worker classification disputes I have learned that although in reality there may be shades of gray distinguishing between what constitutes an employee and what constitutes an independent contractor the US Treasury has some very specific positions. ┬áHere are four that will hopefully help you make the…

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IRS Form 8952 – Voluntary Worker Classification Settlement Program

I received an interesting call today from a small business employer who was reported to the IRS by a disgruntled past worker who claimed that he was paid as an independent contractor (and received IRS Form 1099) when in actuality he believed himself to be an employee (that should have received IRS Form W-2) for…

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Employer Misclassification of Workers

The IRS and Department of Labor have joined forces to reduce employer misclassification of workers. Last fall, the IRS began auditing 6,000 companies to determine if they have misclassified workers as independent contractors or properly classified the workers as employees and paid the required employment taxes. If an individual who has been treated as an…

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How to Classify Worker – Independent Contractor or Employee

The IRS uses the common-law factors listed below to determine whether a worker is an independent contractor or an employee. All the factors below must be taken into consideration in determining worker classification Instructions. An employer should not tell an independent contractor how to do a job. Training. An employer should not provide substantial training…

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Worker Classification

Employers must withhold Social Security and income taxes from employee paychecks. Conversely, independent contractors are responsible for reporting and paying their own Social Security and income taxes. Businesses use several factors to determine how to classify its workers, including the degree of control the business has over its workers. Generally, the more control the business…

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