Independent contractors and the IRS

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 [...]