Contractor vs. Employee: How to Tell the Difference and What to Do if the IRS Audits You

This webinar will cover what the IRS looks at when auditing whether a worker is an employee or a contractor. We will cover the current “3-factor” standard the IRS uses, as well as the older “20-factor” standards. We will also discuss the relief options available if you get audited and the IRS reclassifies contractors as employees.

NOTE: This webinar specifically focuses mostly on the IRS but we also talk briefly about other agencies that could audit this issue, such as the DOL or state agencies.

IRS audits on the subject of whether a worker is a contractor, or an employee are on the rise. States are also increasing enforcement in this area. 

This webinar will help you tell the difference between a contractor and an employee and what to do if the IRS audits your business.

• Why it’s important to know the difference between contractors and employees
• All the different ways you can get audited: IRS, DOL, and states (we focus on the IRS mostly in this webinar)
• The IRS’s current 3-factor test
• The older - but still referenced - 20-factor test
• Dealing with borderline situations - are they a contractor or are they an employee?
• Form SS-8 - what to do if an employee file one
• IRS relief programs: Section 530; Section 3509; the voluntary compliance program

Understanding the key distinctions between contractors and employees is essential to avoid legal and financial repercussions. This involves considering factors such as the level of control over work, the degree of independence, and the nature of the working relationship. By providing clarity on these factors, businesses can make informed decisions regarding worker classification. This topic delves into the nuances of determining the classification and offers guidance on how to navigate potential challenges, particularly in the event of an IRS audit.