Businesses that hire independent contractors might face devastating consequences if the Internal Revenue Service (IRS) or a state agency, such as the Employment Development Department in California, reclassifies these independent contractors as employees. In the eyes of the Government, businesses often abuse the system to avoid paying their share of payroll tax and unemployment insurance.
Affected businesses may have to pay past-due payroll taxes and interest, as well as penalties for failure to file payroll tax returns, failure to pay tax and for failure to deposit payroll taxes. This can equate to tens or hundreds of thousands of dollars in potential liability.
Both the IRS’s worker reclassification examinations and those of the various states have become increasingly aggressive. At Brunoro Law, we can assist you during the entire process to make sure the law is interpreted and applied correctly, preventing unfairness towards the business and the individual workers, who might suffer severe financial damage by the reclassification as well.
Contact us to learn more about our services.