Section 530 Relief
Employers that have workers which the employer classifies as "independent contractors" (Form 1099) risk having these workers reclassified by the IRS as employees. This 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, and the employer will also be required to treat the "reclassified" contractors as employees going forward.
If an employer is audited by the IRS, the IRS will generally find ...
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 which make payments to these contractors must also separately report these payments. The IRS imposes penalties on employers who fail to timely meet their filing requirements, as well as penalties and interest for not making timely tax deposits and/or payments to the IRS.
- Penalties
Forms 941 and 940
- Subject to limited "reasonable cause" exceptions, the failure to ...
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 ...