PFAU ENGLUND.nonprofit law, p.c...Independent Contractors

The IRS is vigourously enforcing employment/independent contractors rules because it is convinced that more than 3.4 million workers are misclassified as independent contractors resulting in loss of an estimated $1.5 billion in uncollected taxes and fraudulent deductions.

Organizations found to have misclassified workers as independent contractors are subject to paying the back income taxes due, plus a penalty of 1.5% of the wages that should have been withheld, plus 20% of the unpaid social security taxes for each of the misclassified workers for the past three years.

The IRS is vigourously enforcing employment/independent contractors rules because it is convinced that more than 3.4 million workers are misclassified as independent contractors resulting in loss of an estimated $1.5 billion in uncollected taxes and fraudulent deductions.