To contact us Click HERE
Three-year study. The IRS is randomly selecting 2,000 returns from all types of employers in the private, tax-exempt, and government sectors as part of the three-year NRP payroll tax audit that began in February 2010. "This is the first time the IRS has conducted an employment tax study since the early 1980s. Based on studies from more than 10 years ago, the IRS has estimated that employment tax underreporting accounts for approximately $54 billion of the $345 billion tax gap (the difference between what taxpayers owe and what they pay). In other words, the IRS wants to be sure they are getting the proper amount of payroll taxes they are due.
Under Review. Employers selected for participation should expect to provide the IRS with a variety of documents, including:
• payroll tax records
• W-2 forms
• exemption worksheets (the IRS is taking a close look at worker classification).
Misclassifying a worker as an independent contractor, when they should actually be classified as an employee, can result in liability for employment taxes and for the 100-percent penalty for failure to collect and account for employment taxes. The IRS uses three characteristics to determine the relationship between businesses and workers --behavioral control, financial control, and the nature of the relationship.
The Test. The basic test for determining whether a worker is an independent contractor or an employee is whether the principal(boss/owner) has the right to direct and control the manner and means by which the work is performed. When the principal has the "right of control," the worker will be an employee even if the principal never actually exercises the control. If the principal does not have the right of direction and control, the worker will generally be an independent contractor.
What to Do. We encourage all employers to review the classification of all your independent contractors. Using the EDD employment determination guide, found at: http://www.edd.ca.gov/pdf_pub_ctr/de38.pdf an owner can determine whether a worker is most likely an employee or an independent contractor.
More questions? Give us a call, we can provide you with exemption worksheets and help you properly classify all of your employees!
JOIN CEA TODAY!
Established in 1937, CEA is a non-profit association providing personalized and cost effective comprehensive information, services, and training for all aspects of human resources management,California Labor Law and relations solutions throughout California. Located throughout the state, CEA’s staff of regional directors draw upon more than 150 years combined knowledge and experience to assist in all aspects of employer-employee relations.
For more information please contact:
Scott J. Dear, Director of Membership Services
Toll free 1-800-399-5331 or 916-921-1312
Mobile 916-281-5898
Email: sdear@employers.org
Website: www.employers.org
Twitter: Caemployers
Hiç yorum yok:
Yorum Gönder