IRS Gives Past Payroll Tax Relief to Employers Who Voluntarily Reclassify Their Workers According to Tax Resolution Firm Top Tax Defenders

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The IRS has developed a new program giving employers a low cost way to voluntarily reclassify workers and resolve compliance issues. According to tax resolution services firm Top Tax Defenders, businesses and taxpayers accepted into the program will benefit by avoiding interest or penalties while addressing their tax responsibilities.

Tax Resolution Company - Top Tax Defenders

This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.

Last month the Internal Revenue Service started a new program that allows many employers to resolve past worker classification issues and receive a determination of their status as employers under the tax law at a low cost to the small business employer. This resolution is achieved by the employer voluntarily reclassifying their workers as employees rather than contract workers and is designed to help the employer avoid IRS tax problems regarding worker classifications.

According to a spokesperson for tax resolution firm Top Tax Defenders, the new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit. This is part of a larger initiative by the IRS to help taxpayers and businesses address their tax responsibilities.

“This settlement program provides certainty and relief to employers in an important area,” said IRS Commissioner Doug Shulman. “This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.”

Under the new initiative, eligible employers can reduce the amount of federal payroll taxes they may have owed for the past as long as they prospectively treat their workers as employees. This program is available to allow business owners, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

To be eligible, the entity must have filed all required 1099’s for these nonemployees for the past three years and not be currently under audit by the IRS, Department of Labor or a state agency concerning the classification of their workers.

If accepted into the program, the employer will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year and no interest or penalties will be charged.

The application should be filed at least 60 days before the employer wants to start treating the workers as employees.

About Top Tax Defenders:

Top Tax Defenders is a tax resolution firm specializing in relieving tax problems. The Houston-based company helps taxpayers nationwide lessen their tax debt burdens and resolve tax issues including help with payroll taxes, unemployment taxes and other state and federal tax problems.

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Teresa Pitre
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