Employers Beware Of IRS Worker Classification Crackdown

Law360, New York (June 9, 2014, 2:05 PM EDT) -- Increased federal and state budget deficits coupled with the rollout of the Affordable Care Act have the Internal Revenue Service and state tax authorities cracking down on companies that misclassify employees as independent contractors, and businesses that do not wise up could face devastating consequences.

The IRS and state employment agencies stepped up enforcement in recent years, slapping businesses with civil penalties for accidental misclassification and owners with jail time for intentional misclassification, experts told Law360.

“This is really a high-stakes game because the worker classification issue affects so many types of tax and employment laws, with both civil and potential...

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