Worker classification update – IRS revamps VCSP program

Description

Abstract: More and more businesses are using independent contractors to benefit from staffing flexibility and to achieve tax savings. But this latter item has increasingly attracted the attention of the IRS, which is wary of businesses misclassifying full-time employees as contractors, and is ready to serve up stiff penalties for doing so. But a voluntary self-reporting program can mitigate this. This article explains how the Voluntary Classification Settlement Program can benefit those businesses eligible to participate, while a sidebar discusses how to maintain the distinction between employees and contractors.