Independent Contractor (Self-Employed) or Employee?
A majority of payroll tax problems arise when the California Employment Development Department or the IRS claim that you improperly categorize and then compensate your workers as “Independent Contractors” (Self-Employed) and not actual employees. The EDD and the IRS use a complicated 20-factor test to evaluate whether a worker is an employee or an independent contractor.
Orange County Tax Attorney and Payroll Lawyer, Paul W. Raymond has an in-depth understanding of this 20-factor worker classification test, and can help you to gather evidence necessary to make a case and convince the EDD or IRS that your workers were properly treated as independent contractors. If we cannot agree with the tax auditors from the EDD or IRS we may be able to work out an understanding that if you begin to treat your workers as employees from this point forward that all is well. If these government entities are stubborn and unconvinced, Tax Attorney Williams can represent you before the EDD or IRS Appeals Office to get you the best outcome possible..
There are some other options possible. For example, we can determine if you qualify for a safe harbor provision known as Section 530 relief. Section 530 relief is available to employers who have consistently treated their employees as independent contractors and had reasonable basis to do so based upon prior requirement, common-practice and other variables we can argue.
Finally, having a competent tax attorney on your side, you are in a far better position to resolve any resultant tax debt from this situation or any prior problems that have caused you or your business to accrue unpaid employment tax debts. If you or your business owes the state or the IRS payroll taxes, you may also qualify for an “offer in compromise” or an “installment agreement.” Tax Law attorney Paul W. Raymond is a great resource who can negotiate the best possible debt reduction deal on your behalf.