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1099 Risk Blog
IRS Enforcement
March, 10 2010
For any large organization, managing the risks of using independent contractors is a tremendous burden. The whole question of 1099 vs W-2 worker classification is perplexing, and the co-employment aspect of 1099 risk plus the fear of contractor lawsuits makes things even murkier. But for federal contractors the bar is set much higher, and the consequences for getting things wrong are far more worrisome. So what's so special about 1099 risk for federal contractors?
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Tags:
misclassification,
classification,
contracts,
IRS,
DHS,
e-verify,
delinquent,
taxes,
tax,
presidential,
Obama,
memo,
federal,
contractors
February, 3 2010
Monday's release of Obama's 2011 Budget has generated a flurry of excitement regarding an increase of $25 million for the Department of Labor (DOL) to go after worker misclassification in a joint effort with the Treasury. The efforts are expected to increase Treasury receipts by more than $7 billion over a ten year span. But the $25 million line item in the budget doesn't tell the whole story of what's intended for the future of worker classification enforcement in Obama's 2011 budget. Hey . . . what's this $8 billion for the IRS to target critical areas of non-compliance? And why isn't anyone excited about that?? Read on . . .
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September, 23 2009
The IRS will audit as many as 6000 companies for employment tax compliance and proper worker classification -- starting in November of 2009. The audits are part of the Treasury's National Research Program and will be the first study of worker misclassification since 1984. Is your company on the list, and do you have a formal process in place for addressing worker misclassification? Read more about contractor and employee classification in the New GAO Report on Employee Misclassification.
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September, 10 2009
The GAO recently published a new report on worker classification, and here it is in full text for you: GAO-09-717 Employee Misclassification: Improved Coordination, Outreach, and Targeting Could Better Ensure Detection and Prevention. It seems that the leadership of DOL, OSHA, and IRS agree with the recommendations, and there is energy for the reform of independent contractor classification and compliance. The congressional requesters were Senators Kennedy (may he rest . . .) and Durbin, and Representatives Woolsey and Andrews. This bodes well for H.R. 3408 or similar to make progress . . .
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April, 10 2009
As our senior management representative handling new customer implementations, I’m privy to some of the best facial expressions business executives have to offer. A few weeks ago, I visited a new customer to begin implementing our Independent Contractor Compliance services, which included...
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April, 3 2009
Last fall, I learned of a curious event in the world of Independent Contractor risk: a government agency was being audited by the IRS for its use of Independent Contractors. The audit found the agency to be liable, and the IRS levied penalties. Although the fines did not seem to be of the level I have seen with private industries, it did come with the stipulation that the agency clean up its act in the next six months or it would...
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March, 27 2009
The IRS was alerted to a growing epidemic of worker reclassification by a Treasury Department report issued last month. In our last blog post on misclassification, we discussed why employee reclassification was on the rise in America. In the second part of this short series, we will look at...
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March, 20 2009
Worker misclassification, and the process by which the IRS identifies and handles such misclassifications, was highlighted by the Treasury as a critical issue in a report issued last month. The report’s title says it all: “While Actions Have Been Taken to Address Worker Misclassification, and Agency-Wide Employment Tax Program and Better Data Are Needed.” The last review of the impact of misclassification (the improper assignment of employees into 1099 independent contractor status) dates back to 1986, and thus the IRS does not have a grasp on exactly what damage . . .
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December, 3 2008
As the year coasts to a close, it's always a good time to review the Essentials of IC Classification. How to tell if a professional worker is an employee or a contractor? Remember, that decision is not up to you -- it's decided by the realities of the working relationship, and enforced by the IRS. To get ready for 2009, this blog is going to offer up a not-to-be-missed series of Independent Contractor Classification Tips for HR, Procurement, and Contingent Workforce Program Managers. But to lay a little groundwork before we do, here are the basics on what distinguishes Employees versus Contractors.
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February, 20 2008
IRS says Fedex owes $319 mln
in back taxes: filing
Reuters
Friday, December 21, 2007; 9:30 PM
LOS ANGELES (Reuters) - Fedex Corp (FDX.N)
said on Friday that the U.S. Internal Revenue
Service found that its FedEx Ground independent
contractors should be reclassified as employees
for tax purposes and that the company faced
related taxes and penalties of more than $319
million for 2002.
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Tags:
IRS,
misclassification,
reclassification,
back taxes,
contractors,
1099,
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coemployment,
defined benefits ,
plan,
ic's,
fedex,
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Recent NewsMBO Partners Appoints Jay Lash VP of Market Strategies
March 1, 2010 -- MBO Partners appointed Jay Lash as VP of Market Strategies. Lash, formerly with Allegis Group Services, brings over 25 years of experience in contingent workforce management, VMS, MSP, and human capital solutions, and will be focused on building strategic partnerships to make it easier for independent contractors and companies to work together in a business climate of increasingly stringent compliance.
Read the press release >
Visit the newsroom > New ResearchContingent Labor Strategies for 2010 and Beyond
This research from Aberdeen benchmarks performance of 200 companies with respect to contingent workforce management. The study found the risks of contingent labor, particularly independent contractors, must be mitigated, while delivering performance across areas like time, cost, and compliance with labor policies and employment law.
See all white papers > Download White PaperE-Verify Requirements for Contractors
Jointly produced by Michael Best & Friedrich LLP and MBO Partners, this paper offers a groundbreaking overview of the legal ramifications and risks for federal contractors required to use E-Verify, with particular attention to how the new regulations apply to independent consultants, independent contractors, small vendors, and other sub-contractors. Get the paper here!
See all white papers > Talk With Our ExpertsCall 1-800-220-0469, or complete this form. Our experts will be in touch promptly.
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