Article Date:
December 2011

Word Count:



New IRS Forgiveness Program for Improper 1099 Payments to W-2 Employees Is Not the Gift It Appears to Be

You can save a bundle on payroll taxes and benefits by paying workers as 1099 independent contractors.


But if those workers are really W-2 workers, you face big IRS penalties, including the 100 percent trust fund penalty.


You can even face lawsuits from the 1099 workers who want the courts to make them W-2 employees, and then watch as the courts award cash from you to them for the benefits they missed.


IRS Cease-Fire Arrangement


The IRS has waged a small war against businesses that, in its view, misclassify workers to achieve payroll tax savings.1


Thus, it came as a bit of a shock when in September 2011 the IRS ... Log in to view full article.

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