TAX-SAVING STRATEGIES  November 3


How To Escape Paying Old Business Payroll Taxes

326 words, 2:25 minute read time

by Dean Ferraro, EA

As an employer, are you classifying your workers as independent contractors when they actually should be employees?

If so, we have a program that can help you qualify to voluntarily reclassify them.

If the IRS approves our work, you won't have to pay federal payroll taxes for the past! ...as long as you start designating your workers as employees for future tax periods.

The IRS calls it the Voluntary Classification Settlement Program or VCSP.

I can help you get approved for this program by helping you prepare the package to send in to the IRS.

To qualify for the program, you must meet certain eligibility requirements such as:

  • You’ve consistently treated your workers as independent contractors or nonemployees in the past.
  • You’ve filed all of your required 1099 forms.
  • You're not currently being audited by the IRS for employment taxes.
  • You're not being audited by the US Department of Labor or a state agency regarding the classification of your workers.

It's OK, if you made a mistake that most new and small business owners make. The IRS is changing its approach. 

To get started, do some research to see if you might qualify.

Start by:

  • taking a look at your human resource records,
  • look for the consistent treatment of how you’ve classified your workers,
  • go over any 1099-MISC forms your business has filed in the past,
  • make sure any audits you might be going through are finalized.

I’ll check your eligibility according to the tax code, go over your research with you, then we’ll fill out the required paperwork and submit it to the IRS.

We'll take it from there and help you with the rest of the process of getting those back payroll taxes figured out.

For a complete list of the eligibility requirements see the instructions for Form 8952.

To find out more about the program just go to irs.gov/vcsp