Tax Law Insights

Employers are generally required to withhold and pay employment taxes on wages paid to employees. Conversely, employers are generally not required to withhold and pay employment taxes on wages paid to independent contractors or nonemployees. If an employer incorrectly treats an employee as a nonemployee, the employer is potentially liable for the employment taxes which should have been withheld. The employer may often not learn of this liability for years, until an IRS notice appears in the mail.

Section 530 of the Revenue Act of 1978, as amended, provides relief for employers who ...