When classifying a worker as an employee or an independent contractor, an employer needs to consider the tax consequences of each. Some tax ramifications and benefits favor employee status, and others favor independent contractor status. These consequences relate to withholding, employment, and payroll taxes, as well as resulting in compensation, expenses, and deduction issues for both the employer and the independent contractor or employee. Attorney Raymond J. Muratori is a licensed Connecticut attorney who can assist you with tax issues related to the classification of your workers for the future or if you believe your workers have been misclassified in the past. With 25 years of experience as an attorney, Old Saybrook tax lawyer Raymond J. Muratori can use his knowledge of this area of the law to ensure that you understand the regulations regarding your situation and that you make any corrections necessary to avoid any other classification-related problems.
In 2011, the IRS created a new settlement program called the Voluntary Classification Settlement Program (VCSP), which allows employers to voluntarily reclassify all of their workers and achieve certainty under the current tax laws. There are eligibility requirements in order to qualify for relief under this voluntary program, and that is where it would be beneficial for you to have a knowledgeable tax attorney to help you navigate the procedures of reclassifying your workers and the tax consequences that come with it.
Another risk that employers face is the IRS Worker Classification Audit. An increase in the amount of workers classified as independent contractors has significantly reduced the amount of payroll taxes that the IRS collects. Therefore, the IRS is persistent in its audits of business employers and non-profit organizations in order to determine if the proper classification has been met. An Old Saybrook tax lawyer can assist you in the audit process to determine what documentation you can use on your behalf to demonstrate that you have classified your workers correctly. The VCSP was amended in 2012 to allow those employers already involved in audit proceedings, other than an employment tax audit, to reclassify their workers at that time.
With a strong understanding of tax law, and over two decades spent as a licensed tax professional, Raymond J. Muratori, Attorney at Law, is prepared to help you with any worker classification-related issues you may be facing. He can utilize his experience and knowledge of the law to help you understand your situation, as well as to create a strategy that is unique to your needs. Contact the firm at 860-388-3599 to learn how Mr. Muratori may be of service to you.