Nicholas Hartney, E.A.©

In an effort to avoid paying workers compensation, FICA, Medicare and Unemployment taxes, many of my clients misclassify their workers as independent contractors and end up being audited and forced to pay back taxes on their employees as well as hefty penalties and interest.   This forces many small businesses out of business.  When deciding if a worker should be classifed as an employee or independent contractor the IRS looks at 20 factors, as follows (if the questions are answered in the affirmative then the worker is an employee and not an independent contractor): Whether the party for whom a worker is performing services has the right to instruct the worker concerning the details of how the work is performed. Whether the employer provides training for the worker. Whether the worker's services are integrated into the employer's operation. Whether the worker must personally render the services. Whether the employer hires, supervises, and pays any  workers w...