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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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If a person has been paying help as contract labor for over

Customer Question

If a person has been paying help as contract labor for over 10 years and then a new person helping them turns in their 1099 to their tax preparer and that results in questions being raised about validity of contract labor. How does a person resolve this? Never happened before in 10 years.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: The tax preparer did turn it in and then IRS sent questionnaire and gave decision that should have been withholding payroll taxes. If other workers are content with it being contract labor, does a person still have to start reporting payroll taxes --- even if workers do not want it?
Submitted: 6 months ago.
Category: Tax
Expert:  emc011075 replied 6 months ago.

Hi. My name is ***** ***** I will be happy to help you.

It is not up to he workers or the employer to decide. The employer has to follow specific rules set the by IRS when choosing the correct classification for his workers. If the employer has been misclassifying his worker for over 10 years, he is looking at huge penalties.

Here's how the workers should be classified. http://employment.findlaw.com/hiring-process/being-an-independent-contractor-vs-employee.html

Generally, if the employer control when and how the job is done, the workers are employees, not contractors.

Expert:  emc011075 replied 6 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?