IRS the Latest to Target Companies Incorrectly Classifying Employees as Independent Contractors

The Internal Revenue Service (IRS) is the latest government agency to crack down on the improper classification of employees as independent contractors. CBS Moneywatch reports that a small home care services business recently audited by the IRS was determined to be incorrectly classifying all of its workers as contractors, putting the 35 person business on the hook for back federal employment taxes, Social Security taxes, federal unemployment tax, and potentially additional state taxes. CBS Moneywatch reports that the fine imposed by the IRS amounted to more than $2,400 per year for each worker improperly identified as an independent contractor.

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