Comply with Employee vs. Independent Contractor IRS Tax Rules
The so-called gig economy has upset familiar notions of how workers identify themselves. How is an employer supposed to know for sure whether its latest hire should be treated as a full-fledged employee or as a more flexible contractor?
Under the IRS’s program to resolve independent contractor employee issues, improper classification – innocent or otherwise – of employees as independent contractors can lead to liabilities exceeding 50% of the workers’ annual wages. While employers must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on employee wages, they do not have to do so for independent contractors. So where is the line between employee and independent contractor, and how can a tax practitioner or attorney help his or her clients avoid liability with the IRS for misclassification?
This session with tax attorney Robert McKenzie will help the tax professional understand the difference in classifying a worker as an employee or an independent contractor. He will also help you prepare prevention tactics and legal defenses to avoid financial devastation of an additional tax assessment in the employee vs. independent contractor area.
The 20 common law factors
IRS classification settlement program
Stopping an IRS employment tax auditor dead in his tracks with the three Section 530 safe harbors
Effectively using new pro-taxpayer appeals procedures
Effectively settling cases using the IRS classification settlement program
Robert E. McKenzie is a Partner of the law firm of Arnstein & Lehr LLP of Chicago, Illinois, concentrating his practice in representation before the Internal Revenue Service and state tax agencies. He has lectured extensively on the subject of tax representation and has presented courses be...