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IRS Amnesty Program Causes Work Comp Class Code Confusion

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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.

Picture Of Gavel Amnesty Program In Court
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Workers Compensation Classification Codes are for example:

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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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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