{"id":71,"date":"2011-12-01T23:36:33","date_gmt":"2011-12-01T23:36:33","guid":{"rendered":"http:\/\/old.sommers-taxapedia.com\/archives\/?p=71"},"modified":"2012-08-08T00:09:14","modified_gmt":"2012-08-08T00:09:14","slug":"irs-settlement-program-independent-contractors-vs-employees","status":"publish","type":"post","link":"https:\/\/sommers-taxapedia.com\/archives\/irs-settlement-program-independent-contractors-vs-employees\/","title":{"rendered":"IRS Settlement Program – Independent Contractors vs. Employees"},"content":{"rendered":"

Introduction<\/strong><\/p>\n

Employers who determine that they are misclassifying workers as independent contractors should take advantage of a new IRS Voluntary Classification Settlement Program (the “VCSP”).<\/p>\n

The Basics<\/strong><\/p>\n

In essence, VCSP prospectively treats workers as employees instead of independent contractors at a cost of approximately 1% of the compensation paid to the workers reclassified during the most recent tax year.<\/p>\n

Example:<\/strong>\u00a0Company paid $100,000 to four independent contractors during tax year 2011. If the Company applies for VCSP, it pays a penalty of about $1,000 and agrees to classify the workers as employees from tax year 2012 forward.<\/p>\n

Eligibility<\/p>\n

To participate in VCSP, the company:<\/p>\n

    \n
  1. must have consistently treated the workers as nonemployees;<\/li>\n
  2. must agree to treat all workers in the same class as employees;<\/li>\n
  3. must have filed all required Forms 1099 for the workers for the previous three years;<\/li>\n
  4. cannot currently be under audit by the IRS; and<\/li>\n
  5. cannot be currently under audit concerning the classification of the workers by the Department of Labor or by a state government agency.<\/li>\n<\/ol>\n

    Evidently, there is no deadline for participation.<\/p>\n

    Conclusion<\/strong><\/p>\n

    Companies with questionable worker classifications should strongly consider VCSP as a cost-effective way to avoid potentially huge taxes and penalties.<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Introduction Employers who determine that they are misclassifying workers as independent contractors should take advantage of a new IRS Voluntary Classification Settlement Program (the “VCSP”). The Basics In essence, VCSP prospectively treats workers as employees instead of independent contractors at a cost of approximately 1% of the compensation paid to the workers reclassified during the …Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,1],"tags":[13,12],"class_list":["post-71","post","type-post","status-publish","format-standard","hentry","category-employee-stock-options","category-general-tax-information","tag-employees","tag-independent-contractors"],"_links":{"self":[{"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/posts\/71","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/comments?post=71"}],"version-history":[{"count":8,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/posts\/71\/revisions"}],"predecessor-version":[{"id":77,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/posts\/71\/revisions\/77"}],"wp:attachment":[{"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/media?parent=71"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/categories?post=71"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sommers-taxapedia.com\/archives\/wp-json\/wp\/v2\/tags?post=71"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}