Independent contractor misclassification can seem like a mythical idea. Many small business owners believe it is something that only happens to very large companies, like FedEx. Does the government really care about the details behind how a small business working with a freelance writer for website copy? The truth is that audits are private, so you only hear about high profile cases that become class action suits. Businesses of all sizes have received the dreaded audit notice. In fact, these occurrences have become more frequent as federal and state governments have trained more resources on the issue to crackdown on violators and collect fines.
With proper education and planning you can minimize your audit risk while continuing to leverage your vital external human resources.
Need to know information for any individuals or companies hoping to engage independent professionals in the 21st Century.
MBO Partners developed a calculator that quantifies what we can: the IRS component of the risk. Our legal team scoured the IRS code and assembled the possible penalties into a single easy-to-use calculator.