IRS Increases Worker Classifications Cases Referred By States – Los Angeles Wage & Hour Claims Attorneys Blumenthal, Nordrehaug & Bhowmik

by Norman B. Blumenthal on June 27, 2013

1040 FormUsing a memoranda of understanding, the Internal Revenue Service (IRS) and 37 states have agreed to 1) exchange audit reports; 2) exchange audit plans; 3) where appropriate participate in side-by-side examinations; 4) receive information; and 5) participate in reciprocal sharing of information.  In 2009, the IRS launched the Employment Tax National Research Project.  Since then over 6 thousand employment tax returns have been audited for the tax years 2008 through 2010.  Seventy percent of the audits have been closed, with the remainder expected to close in the next ten months.  And once completed, the IRS employment agents involved with the Employment Tax Project will focus on identifying businesses that misclassify employees, either as independent contractors or exempt from Fair Labor Standards Act oversight.  State Workforce Agencies are expected to make a similar determination when they conduct an employment examination, and forward potential misclassifying employers to the IRS.

Recently, The Wall Street Journal reported that IRS agents have been “visiting” small businesses to see if workers are classified correctly.

Blumenthal, Nordrehaug & Bhowmik is an experienced California employment law firm with offices located in San Diego, San Francisco and Los Angeles. The firm dedicates its practice to contingency fee employment law work for issues involving misclassification as a salaried worker exempt from overtime, failure to pay vacation wages, misclassification as an independent contractor, off-the-clock work, wrongful termination, discrimination and other California labor laws.

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