IRS To Conduct Employee & Independent Contractor Audits This Year

Starting in February 2010, IRS officials will start random audits of approximately 6,000 U.S. businesses. These random audits are intended to help close the estimated $15 billion “tax gap” that the U.S. Government Accountability Office (GAO) believes is attributed to workers being misclassified as independent contractors versus company employees.

The IRS will also be reviewing for the proper issuance of Form 1099-Misc for any workers classified as independent contractors. It is suggested that prudent employers should review the classification and documentation maintained for any “independent contractor” associated with their business. Check out OMEDA.org/
fastfacts/3180.htm for employment tax compliance and proper worker classification for factors utilized to clarify the differences between an “employee” versus an “independent contractor”.