Worried About An IRS Payroll Audit?
March 20, 2013 Leave a comment
Many film productions have been paying their employees as independent contractors. Some have been issuing 1099’s, others haven’t. The IRS has been searching through industry looking for such employers, and have very smartly come up with a program to have businesses come to them voluntarily.
See this link to an IRS publication explaining the concept. Here’s a quote from the last paragraph:
“Employers accepted into the program will generally pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Employers applying for the temporary relief program available for those who failed to file Forms 1099 will pay a slightly higher amount, plus some penalties, and will need to file any unfiled Forms 1099 for the workers they are seeking to reclassify.” – http://www.irs.gov/uac/IRS-Expands-Voluntary-Worker-Classification-Settlement-Program
Some of you may be interested in consulting with your tax consultant. It could be a cool way to segue into the IRS’s good books.