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IRS has a program to voluntarily reclassify contractors as…

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IRS has a program to...
IRS has a program to voluntarily reclassify contractors as employee:
https://www.irs.gov/businesses/small-businesses-self-employed/voluntary-classification-settlement-programI have several employees who were first hired as independent contractor (1099) and later converted to salary based employees. The program above seems to only apply if I'm still treating them as contractors (Part IV of form 8952).If I want to voluntarily convert fix my past mistake to eliminate the potential headache of being audited, what form should I use?
Submitted: 1 month ago.Category: Tax
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3/7/2018
Tax Professional: Lev, Tax Advisor replied 1 month ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,707
Experience: Taxes, Immigration, Labor Relations
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The Voluntary Classification Settlement Program (VCSP) offers certain eligible businesses the option to reclassify their workers as employees with partial relief from federal employment taxes.
What you might looking for - having the IRS help to determine the status of workers by using Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
https://www.irs.gov/pub/irs-pdf/fss8.pdf
Employers and workers file this form to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.

Filing a Form SS-8 requesting a “worker status” determination means the employee or the employer is asking the Service to establish if the services provided are those of an employee or an independent contractor.
Here are instructions
https://www.irs.gov/pub/irs-pdf/iss8.pdf
Please be aware - that might take up to 6 months to get determination.
But you will have an official determination.

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Customer reply replied 1 month ago
I am pretty convinced those guys should be classified as employee. So I just want to makeup those employer payroll tax. What form should I use?Also after the reclassification, what do the employees need to do about their already filed taxes as 1099 contractor?
Tax Professional: Lev, Tax Advisor replied 1 month ago

If you are sure regarding classification - you do not need to have an official classification from the IRS.
If you want to make correction for the current tax year - you will need to report compensation on W2 and not on 1099misc.

If you already issued forms 1099misc - and want to correct that - you will need to file 1099misc as voided - and issue W2.

If you did not remit payroll taxes timely - you will need to do that as soon as possible - and there will be penalties for doing late.

You will need to correct employment tax returns - federal and state.

Those workers who already filed their tax return will need to amend their individual tax returns.

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Tax Professional: Lev, Tax Advisor replied 1 month ago

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Customer reply replied 1 month ago
Is there a program similar to VCSP that's applicable to employers already converted those contractors to employee status? That's the only reason I am not eligible for that program. It requires that I cannot hire those contractors as employees for 60 days after I submit the application.
Tax Professional: Lev, Tax Advisor replied 1 month ago

VCSP offers a partial relief from federal employment taxes...

Otherwise corrective actions will result full responsibility for employment tax and penalties...

In additional - your state DOL may audit and force to reclassify workers as employees -that will automatically trigger IRS re-classification...

So if you are uncertain if there will be an issue - you may silently change classification for instance starting from this tax year.

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Tax Professional: Lev, Tax Advisor replied 1 month ago

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Experts are ONLY credited when answers are rated positively.

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