Payroll Audits Put Small Employers on Edge

In the spirit of keeping you informed on what is going on in tax news, I am passing along information on a hot topic that made headlines today in the Wall Street Journal, WSJ.com – Payroll Audits Put Small Employers on Edge, Tax Crackdown Comes as Use of Contract Workers Grows. 

The rules for classifying workers can be confusing, but effort should be made to understand the rules and to properly classify the workers.

From the article on wsj.comIn recent years, Congress has proposed various bills to clarify the definition of independent contractors, including as recently as December, though none of the bills has passed.

Chris Whitcomb, tax counsel for the National Federation of Independent Business, a small-business lobbying group, says that without a clear definition of who counts as an independent contractor, many employers don’t know whether they are complying with tax rules “until they get audited.”

Read the full article

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Marietta Z. Courtney, CPA, MST
Tax and Accounting Services
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