Worker classification audits on the way

As we've posted before, the IRS is increasing enforcement efforts related to worker classification -- meaning the issue of treating a worker as an employee or an independent contractor. AccountingWeb provides an update on these efforts:

Beginning in February, 2010, the IRS is launching an examination of 6,000 randomly selected companies to focus on employment tax issues ranging from executive compensation to fringe benefits. The IRS will perform an examination of 2,000 random companies per year over the next three years. Companies targeted will be of varying sizes and include both for profit and non-profit employers. While these audits can target any reporting aspect of the tax return the IRS's primary focus will be on worker classification, executive compensation, fringe benefits, nonfilers and reimbursed expenses.

More information on this issue, including examples of worker classification for the construction industry, is available on the FAQ section of our website.