IRS Subcontractor Laws
IRS To Step Up Enforcing Subcontractor Laws
Over the years many small contractors misclassified their employees as subcontractors and in doing so avoid having to pay workers compensation , SSI Medicare, Unemployment, withhold taxes and pay other insurances.
Recently the IRS has announced that it will start to randomly audit 2,000 small businesses and an additional 2,000 in each of the following two years in an attempt to enforce it’s newly formed Employment Tax National Research Program.
The IRS has estimated to gain $7 billion over the next 10 years. IRS plans to spend $25 million to hire an additional 100 agents.
My next post will deal with how to determine if someone is an employee or a subcontractor…….