80% of “independent contractors” are in fact employees

According to the IRS almost 80% of “independent contractors” are in fact employees, not independent ccontractors.

As the Internal Revenue Service (IRS) attempts to crackdown, the Department of Labor (DOL) have hired at least 100 additional auditors. Their purpose is to investigate the Misclassification of Independent contractors. The IRS and DOL will accomplished this through enhanced information sharing and other collaboration.
They hope to help reduce the tax gap, and improve compliance with federal labor laws and to send a consistent message to employers about their duties to properly pay their employees and to pay employment taxes.
Specific objectives of this initiative include the following:

Expand the IRS-DOL partnership launched in the Questionable Employment Tax Practices program

  • Reduce the employment tax portion of the tax gap
  • Increase compliance with federal employment and unemployment tax requirements
  • Increase compliance with federal labor laws enforced by the DOL
  • Reduce fraudulent filings
  • Reduce abusive employment tax practices
  • Work together to create education and outreach materials and guidance for employers and workers

Confused about the definition of a 1099 employee vs a W2 employee? Call Profit Boosters LLC for assistance in understanding at: 702-878-6191

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