With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and...
The heads of the Labor Department, the Internal Revenue Service, and 11 state agencies Sept. 19 signed an agreement to coordinate their efforts to fight employee misclassification.
Meanwhile, IRS Sept. 21 launched a settlement program to allow employers to reclassify their workers and come into compliance with the tax system at a low cost.
DOL's Wage and Hour Division, IRS, and agency leaders from Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah, and Washington entered into memoranda of understanding Sept. 19, under which they work together to combat the practice by which some employers incorrectly classify their workers as independent contractors rather than as employees to avoid paying payroll taxes and workers' compensation expenses. Some of the state agencies also signed agreements with DOL's Employee Benefits Security Administration, Occupational Safety and Health Administration, Office of Federal Contract Compliance Programs, and Office of the Solicitor.
DOL's Wage and Hour Division also will enter into memoranda of understanding with New York's attorney general and the state labor agencies of Hawaii, Illinois, and Montana, Labor Secretary Hilda Solis announced Sept. 19.
The memoranda of understanding will enable the federal Labor Department to share information and coordinate law enforcement with IRS and participating states to level the playing field for law-abiding employers and to ensure that employees receive the protections to which they are entitled under federal and state law.
IRS' Voluntary Classification Settlement Program (VCSP) is intended to help taxpayers struggling with the complexity of outdated worker classification rules and give them a fair chance to straighten things out, IRS Commissioner Douglas Shulman said in a Sept. 21 news briefing.
Under the new initiative, unveiled in Announcement 2011-64, employers that prospectively treat their workers as employees can make a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit, Shulman said. Instead of facing back taxes, penalties, and interest for three years of misclassification, taxpayers will be able to pay about 10 percent of the taxes for the most recent of those years, he said.
“For us, this is about doing the right thing,” Shulman said. In answer to questions from reporters, he said that while IRS is targeting small businesses with the new program, it is open to everyone.
Shulman said the program is intended to offer a simpler solution to a complicated problem. IRS has been legally prohibited from writing new rules since a test to determine a worker's status became law in the late 1970s, he noted.
Text of IRS Announcement 2011-64 can be accessed at http://op.bna.com/dlrcases.nsf/r?Open=scrm-8lxsbw .
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)