IRS auditors crackdown on independent contractors

March 31, 2010 · Print This Article

IRS According to CNNMoney, the IRS is going to do random audits of 6,000 companies that use independent contractors.

CNN Money: Auditors Crackdown on Indedendent Contractors

Homeschool organizations might be caught in the web if they are paying teachers as independent contractors.

Here’s what the article states:

(CNNMoney.com) — If your business uses independent contractors, get ready for new scrutiny. Hoping to boost tax revenue, the IRS and many state governments are cracking down on how companies classify their workers.

When employers report wages for independent contractors on IRS form 1099, rather than a W-2, they aren’t required to pay unemployment insurance, worker’s compensation insurance or payroll taxes for them. But the rules governing which workers are genuinely “independent” are strict — and often flouted.

The Internal Revenue Service launched a program last month that will randomly examine 6,000 companies over the next three years for employee misclassifications. The federal government estimates it will raise $7 billion over the next 10 through tighter enforcement.

Should you as a homeschool leader be concerned? Maybe, if your organization has been paying people as independent contractors when they are really employees. How can you tell the difference?

I can help.

Here are some helpful blog posts:

Is Your Hired Teacher Really an Employee?

Update on Teachers as Independent Contractors

PayingWorkersCover I also have a short ebook devoted to the subject of paying workers in a homeschool organization. You can read a sample chapter and the table of contents here.