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The IRS has found many businesses liable for not withholding taxes from the salaries of independent contractors during compliance checks. Unfortunately, the IRS does not bother to check if the independent contractors have paid taxes on their own. Congress added Section 530 to the 1978 Revenue Act to protect employers against retroactive assessment of employment taxes when independent contractors are reclassified by the IRS as regular employees. Seven rules which employers may use in providing the IRS details about independent contractors are presented. Twenty questions which may be used to determine the status of independent contractors are also presented., INTRODUCTION Your business, whether large, medium or small, generally carries on its business with full-time employees with some part-time employees to handle the day-to-day operations. On occasion, however, you may [...]

Employing independent contractors can get you into tax trouble. Some tips for staying out. Using independent contractors to supplement nursing home staffing is commonplace. Shortages of registered nurses, physical therapists, [...]

Small business owners can take some steps to defend their use of independent contractors in cases when the IRS challenges their worker classification scheme. Specifically, small business must prepare their defense in the areas of data collection by requesting for the assistance of their accountant, who will know how to proceed. If the IRS agent asks for a reclassification of workers, companies can seek 'safe haven' in Section 530., Plenty, when it comes to classifying workers as independent contractors or employees. Here's how you can defend your choice of worker if the IRS comes calling. One day, you get [...]

The IRS interpretation of IRC section 530 regarding classification of independent contractors and employees released in a recent Technical Advice Memorandum is contrary to case law and should not be followed. Case law established that a taxpayer demonstrating a reasonable basis for independent contractor treatment of workers is eligible for relief under IRC section 530. The IRS claims that a two-part test must be satisfied. The IRS test classifies the worker and then asks whether section 530 relief is available.

This article deals with the issue of classifying real estate appraisers as independent contractors for employment tax purposes. Based on their experiences representing and advising more than 75 companies in a broad range of industries throughout the United States, and based on their experience taking a case through trial in U.S. District Court, the authors discuss the events that have shaped the current opinions and practices regarding such classification and offer practical guidelines for businesses that use independent contractors. (Reprinted by permission of the publisher.), Do you believe that real estate appraisers are independent contractors? The Internal Revenue Service (IRS) thinks they are not, and even forced one real estate appraisal business to defend itself [...]

A business that claims a worker as an independent contractor rather than an employee is nearly always asking for trouble with the Internal Revenue Service. Making such a claim automatically [...]

Real estate S corporations often face termination of S status due to accumulated earnings and profits (E&P) and excessive passive income. S corporations with prior C corporation status that have accumulated E&P at the end of the taxable year will lose S status in cases where passive income exceeds 25% of gross receipts for three consecutive years. Rental income is often considered passive by the IRS. Owners performing additional services of a substantial nature not incidental to the realization of return on real estate investments greater than those necessary to maintain occupancy will be determined to have self-employment income and avoid having the rental income classified as passive. There is a fine line in the determination of how much additional service turns rental income from passive income into self-employment, so real estate S corporations should obtain a ruling from the IRS.

The Internal Revenue Service has unveiled two new programs dealing with worker classifications and also released a draft of its training manual for IRS agents who conduct employment tax audits. [...]

PHILADELPHIA -- For years, the Internal Revenue Service has attempted to ignore the safe haven provisions of Section 530 of the revenue act of 1978 when it came to defining [...]

The article presents Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, of the U.S. Internal Revenue Services (IRS). It offers guidance on what an employer should do when it receives the determination letter Form SS-8 on the reclassification of an independent contractor who has earlier filed Form SS-8 with the IRS.

The article focuses on Section 530 of the Revenue Act of 1978. The section refers to exemptions to reclassify independent contractors as workers of those businesses that have utilized their services. It examines efforts of the U.S. Internal Revenue Services (IRS) to prevent the use of safe havens provided for under the section by taxpayers to claim relief. INSET: HOW WOULD YOU RULE?.

Focuses on the scrutiny of the United States Internal Revenue Service on hospitals' use of independent contractors through its Employment Tax Enforcement Program (ETEP). Implication of the program to physicians; Implication of the program to health care administration.