Source: Federal Employment Law Articles
Quite often, companies in the construction industry hire “subcontractors” and classify them as independent contractors. However, these companies should take caution in proceeding with such classification. In February, the IRS began its first comprehensive audit of employment tax issues in over 25 years. The main issues to be examined in these audits are worker classification, executive compensation and taxable fringe benefits. (For a broad discussion of all of these issues, please see our Firm’s November 2009 Tax alert IRS Will Audit 6,000 Companies – Make Sure Your Employment Taxes Are in Order.) Because worker classification is an issue that arises often for construction companies, this article focuses solely on worker classification and the factors involved in making an accurate determination.
