CLASSIFICATION WARFARE
In the past some companies have misclassified an employee as an independent contractor and although there is no bright-line test as to whether a worker is an employee or an independent contractor. The IRS is in the works to change that. Many companies in the past have found that treating a worker as an independent contractor was more beneficial because they avoided paying taxes and did not have to offer benefits such as medical, sick pay, vacation pay and workers compensation. In some cases a lot of employers also paid these independent contractors cash to avoid withholding of taxes, or avoid immigration status. Now in the upcoming year the IRS is wanting to put a stop to companies that treat a worker as an independent contractor rather then an employee. The IRS plans to go directly to source (the employer) and suggest they treat those contractors as employees. In essence this is to help keep track of those who are avoiding taxes and hopefully it will produce more