Many employers began to receive notices from the IRS in 2018 proposing the assessment of a payment against the employer for the tax years 2015 and 2016 under Section 4980H of the Internal Revenue Code. The issuance of these notices by the IRS has now increased through 2019 to-date, and where employers may have received an initial notice in 2018 for the 2015 tax year, and now a second and additional notice proposing the assessment of a payment under Section 4980H for the 2016 tax year. Additional IRS notices for 2017 are certainly to follow.
Section 4980H(a) imposes an “assessable ...
IRS Voluntary Worker Classification Settlement Program
Employers that have workers which the employer classifies as "independent contractors" (Form 1099) risk having these workers reclassified by the IRS as employees. This classification is a major audit area for the IRS. If the IRS does audit an employer and reclassifies "contractors" as "employees" this will subject the employer to substantial federal employment tax liabilities, penalties, and interest. The employer will also be required to treat the "reclassified" contractors as employees going forward.
If an employer ...
IRS Form SS-8 Determinations of Employee Status
Employers that have workers which the employer classifies as "independent contractors" (Form 1099) risk having these workers reclassified by the IRS as "employees." This determination is a major audit area for the IRS. If the IRS does audit an employer and reclassifies "contractors" as "employees" this will subject the employer to substantial federal employment tax liabilities, penalties, and interest. The employer will also be required to treat the "reclassified" contractors as employees going forward.
A worker treated by an ...
Employers that pay wages and other forms of compensation to their employees must comply with federal tax return filing and payment/deposit requirement. Employers that receive services from non-employee contractors and make payments to these contractors must also separately report these payments.
- Federal Employment Tax - Form 941
a. Employers are required to collect federal employee income withholding taxes and the employee's share of Federal Insurance Contributions Act taxes (FICA), from wages paid to employees, match the employee's share of FICA, and deposit these ...