The Battle Between W-2 & 1099 (Currently Unavailable)

Author: Marcia Miller

This course reflects the tax law before the enactment of TCJA.

Today's employers must be aware of the complex compliance issues relating to the proper classification of employees versus independent contractors. The IRS plans to flag employers for audit should they issue both a 1099 and W-2 to the same identification number in the same year.

BEWARE! The IRS has also begun a coordinated effort of enforcement and sharing of information with the DOL (Department of Labor) and the States. Take this informative course so you will be prepared to recognize the unique differences between your Employees and Independent Contractors.

Publication Date: November 2017

Designed For
Attorneys, CFOs, CPAs, Enrolled Agents, Accounts Payable and Human Resources Department Heads.

Topics Covered

• Defining Employees versus Independent Contractors
• Costly Consequences of Mis-classifications of Employees
• IRS "Right-to-Control" Test: Rev. Rul. 87-41: 20 Common Law Attributes
• Modernized Twenty Factor Test: Three Categories of Evidence as they appear on Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding);
• Department of Labor "Economic Reality" Test
• Modernized Twenty Factor Test: Three Categories of Evidence
• Safe Harbor Rules & Remedies — Section 530 & Form 8919 Notable Court Decisions
• 2017 Legislative Updates

Learning Objectives

• Recognize the Internal Revenue Service's plan to minimize the "tax gap"
• Identify the new regulations regarding 1099 Compliance to avoid costly penalties
• Differentiate when to classify workers who do the same job differently
• Recognize factors which indicate financial control of a worker
• Identify proper scenarios of worker classification between a company and a worker
• Describe when a person should be classified as an independent contractor in regards to the 20-Factor Test for Independent Contractors
• Recognize how an employee is describe by common-law rules
• Identify factors that should be considered when determining Independent Contractor status
• Utilize the 20 traditional factors for determining worker status
• Describe how an employer shows consistent treatment of a worker
• Recognize why the governments prefers/encourages classifying workers as Employees vs. Independent Contractor
• Identify the Form SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
• Identify benefits to hiring an independent contractor
• Describe factors included as part of the IRS's 20-factor test deciphering whether an individual is an independent contractor \instead of an employee
• Identify examples of a financial control to determine employee status
• Recognize examples of relationship types to determine employee status
• Identify drawbacks for an employer for engaging an independent contractor
• Recognize provisions included within the Payroll Fraud Prevention Act of 2015
• Recognize the proper form used to report payments of nonemployee compensation paid to independent contractors
• Identify the potential percentage saved when hiring independent contractors
• Differentiate improper classification statuses of an independent contractor
• Recognize factors part of the economic reality test generally not hard to meet
• Identify tests used to determine employee status under wage and hour laws and workman's compensation statutes
• Identify a behavioral control to determine employee status

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
A basic understanding of W-2's and Form 1099.

Advance Preparation
None