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

Author: Marcia Miller

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

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.

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 2016

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
  • 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
  • 2016 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


Instructional Method

NASBA Field of Study
Taxes (2 hours)

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

Advance Preparation

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