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Employee vs. Independent Contractor Classification

by: Cary Christian, CFE, CPA, MCP, SCSE, SCFS, SCAD

There are few issues in taxation that have more potential for complete devastation than the reclassification of workers from independent contractors to employees.  When such a reclassification occurs, the employer not only has to pay the withholding, social security and Medicare taxes they would have paid had they treated the workers as employees in the beginning, but they have penalties and interest to contend with and the possibility of 100 percent penalties levied against each "responsible party" in the transaction!  Many businesses who are subjected to this type of reclassification do not survive. 

There is no formula or worksheet that can be completed to tell you if you are properly classifying your workers as employees or subcontractors.  The tests are subjective, based on the particular facts and circumstances in a given situation, and will vary dramatically from one case to the next.  This lack of certainty creates the danger.  The only weapon you have is knowledge.  You must know and understand the tests and rules and be able to apply them correctly to your business situation.

The purpose of this ebook is to help you understand the factors that come into play in making the employee vs. independent contractor determination before the IRS comes calling.  By understanding the rules you can prepare yourself for a potential audit or you can change the way you currently classify your workers if you believe you are in error.  If you currently use contractors in your business, not understanding the rules is not an option!

In this book you'll learn the following:

  • The common law standards that apply in making the determination

  • Whether the "20 Factor Test" is still relevant

  • The types of behavior that constitute behavioral control of workers

  • The types of behavior that constitute financial control of workers

  • How the relationship of the parties should be structured to minimize risk

  • How state law characterizations of employees affect the determination

  • The factors that have become less important over the years

  • How Section 530 relief might not only protect you from an assessment but help you avoid an audit altogether

  • The types of "safe havens" that are available to your company

  • and more!

You can download this ebook today at a low introductory price of only $19.95.  Get yours now by clicking the "Buy Now" button! 

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