IRS cracks down on employee misclassification

03/14/2013 | Wall Street Journal, The

The Internal Revenue Service is surprising entrepreneurs with audits of their payrolls in search of misclassified employees. The crackdown is part of a government effort to look for workers incorrectly classified as independent contractors as a way for employers to avoid withholding payroll and income taxes. Studies show that anywhere from 10% to 60% of small-business employees may be misclassified.

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