Feature Article

March 2, 2010

Are You Prepared for an Employment Tax Audit?

Do you know how many employees you have?  This sounds like a very simple question.  Obviously each person on your payroll is considered an employee.  But what about other people that perform services for  your business?  Even if they’re not referred to as employees, they may actually be your employees in the eyes of the IRS.

The correct determination of employee status has become particularly important recently, as the IRS has begun a three-year employment tax audit program.  The audits, which are expected to start in March, will cover 6,000 employers over the next three years.  While businesses will be selected at random, the focus will be on smaller businesses.  The examinations will be comprehensive in scope.  There are four primary areas the IRS will examine:  worker classification, fringe benefits, officer compensation, and payroll taxes.  Tax-exempt organizations will also be included in these audits.

For additional information or a copy of the complete Employment Tax Audit article, please contact roberta@simon-lever.com.

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