Article: New Crackdown On Using Independent Contractors

[greg8872]

Article in Forbes from Nov 15, 2012 about IC's. Also has good information on defining them, and the consequences of classifying your workers wrong. Thought it might be a useful article for some.

http://www.forbes.com/sites/robertwo...t-contractors/

Increasingly, the IRS, Department of Labor (DOL) and state governments are swapping information. A GAO report claims the IRS is losing billions, while a DOL study says up to 30% of employers misclassify workers. But change is on the way. The DOL announced in 2010 that it would issue regulations requiring companies to write a classification analysis for all workers, including independent contractors.

These proposed regulations are expected to require companies to explain why the worker is or is not covered by the Fair Labor Standards Act. Companies may have to show each worker a copy, leading many to refer to these rules as “Right to Know.” There’s a similar theme in the Fair Playing Field Act of 2010 (H.R. 6128, S. 3786).

[Duekster]

I was told( by my CPA two years ago that an IRS crack down in general is expected and targeting Small Business. Obama care is expensive and one of the rules now would be 1099's reporting on almost every expense. The rule is set up but reporting ( transisition period) was not enforced last year. Part of this is going to be catching people miss classifying employees at contractors because they expect one, to recapure the non-reporting and two for enforcing Obama care provisions including penalties.