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Tax Controversy and Litigation
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The IRS recently initiated an employment tax audit of my business. My accounting department informed me that some of my workers may have been improperly classified as independent contractors. What can I do to limit my exposure?

Consider the Classification Settlement Program (CSP), under which the Internal Revenue Service must offer your company a settlement that includes a significantly reduced liability if your company meets the established criteria, including the consistent issuance of Forms 1099 each year to the class or
classes of workers at issue. If there was a reasonable basis for treating the workers at issue as independent contractors, such as an administrative ruling, a determination in a prior audit, or
long-standing industry practice, your company will only pay 25% of the potential employment tax assessment for the year under audit. If there is no reasonable basis, then your company will pay 100% of the assessed amount for the year. In either situation, the assessment is limited to the year under audit (not past years with potential improper treatment) and the company must agree to treat the workers as employees going forward.

Rosenberg Martin Greenberg

25 South Charles Street, 21st Floor MD 21201
Phone: 410-727-6600
Map & Directions

Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions