Would your business be safe from the reclassification of independent contractors to employees if the IRS or Department of Labor (DOL) decided to audit your use and classification of independent contractors? As the cost of having employees has increased over the years, more and more businesses are trying to avoid those costs by replacing services performed by employees with services provided by independent contractors. However, simply calling someone an independent contractor does not necessarily make them an independent contractor.
Misclassification can become very expensive when challenged by the IRS or the DOL. The result can be responsibility for uncollected taxes, penalties, even disallowance of pension plans and health insurance costs.
To help you better understand the proper classification of independent contractors and employees, we have just released a new publication “Can You Pass an IRS or DOL Audit of Independent Contractors vs. Employees?” It’s available free. To download a copy, simply click here.