Just over a year ago, we posted a blog entry about the Internal Revenue Service cracking down on employers who improperly classify workers as independent contractors rather than employees, and warned that it may be a costly mistake.
Recently, as part of a larger “Fresh Start” initiative, the IRS launched a new program which may provide some relief to certain employers looking to resolve past worker classification issues. That program—the Voluntary Classification Settlement Program (“VCSP”)—allows eligible employers to reclassify the workers as employees and only pay an amount of approximately 1% of the wages paid to the reclassified workers for the past year, with no other interest or penalties. For further details, including eligibility requirements, please visit the IRS website: http://www.irs.gov/newsroom/article/0,,id=246203,00.html
If you are concerned that your independent contractors may be misclassified, and are worried about the potential consequences for you in the event of an audit, we highly recommend consulting a knowledgeable attorney or tax professional to see if the VCSP may be a solution.
In the age of identity theft and tight credit markets, we all know that keeping an eye on your credit is important. Detecting fraudulent activity and errors early allows you to take steps to avoid identity theft and correct mistakes that may cost you money.
Under federal law, each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) are required to provide you with one free copy of your credit report every 12 months. You can easily order your credit reports from these agencies through annualcreditreport.com (online, by phone, or through the mail). BEWARE—there are many imposter websites out there. Annualcreditreport.com is the official site created by the three major credit reporting agencies.
When you order your report(s), you have the option to order one, two, or all three of the available credit reports. While each report may contain different information, each report will generally give you a “snapshot” of your credit at that point in time. Rather than requesting all three at the same time, it may be advisable to stagger your requests throughout the year, requesting a credit report from each of the three agencies at different times. That way, you will be able to see your credit snapshot several times throughout the year, rather than just once, so you can discover potential issues with your credit earlier.
For more information about obtaining your free credit reports, see:
https://www.annualcreditreport.com/cra/index.jsp
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm
