IRS Amnesty Program Has Nothing To Do With Class Codes
The IRS has initiated an amnesty program for Worker Classifications. This is not the same as Workers Compensation Classification codes. The amnesty program was designed for whether workers are independent contractors or employees. This is a great article on the IRS amnesty program. These types of employees or contractors are also sometimes referred to 1099 employees or subcontractors.
Workers Compensation Classification Codes are for example:
- 8810 Administrative Assistant or Clerical
- 7219 Trucking and Transportation (California)
The IRS has never actually been involved in a classification code dispute. The IRS, of course, is more concerned with the unpaid withholding taxes that are filed quarterly on Form 941. Your state taxing authority and the IRS share tax data.
We sometimes receive questions on classification codes as some employers seem to think that if they question their policies then they could be violating some IRS regulation. That is not true.
One of the newest developments is the taxing authorities in each state now share data with the state insurance departments. We have not seen very many cases where a Workers Compensation audit finding having resulted in a tax bill.
This may change in the near future as states such as New Jersey and Connecticut have begun sharing data between all state departments after passing new laws on data sharing. North Carolina has just created the GBICC which is basically a data-sharing department.
Feel free to Google the IRS Amnesty Program.
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