Have you visited the IRS website lately? It has an updated look, a little more user friendly. Not all pages have been updated, but I am sure they are working on it. Check it out www.irs.gov
Last month the IRS offered an Employee Reclassification Agreement.
Employers may reclassify independent contractors as employees and limit the resulting federal payroll taxes for their most recent tax year, plus avoid related penalties and interest for prior years. The IRS outlined its new Voluntary Classification Settlement Program (VCSP). Unlike an existing settlement program for employers under an IRS examination, the VCSP allows eligible taxpayers to voluntarily enter into an agreement with the IRS.
Generally, if an employer has the right to direct and control how a worker performs services for the employer, that worker is properly classified as an employee and the employer must withhold FICA and income taxes from wages and other compensation and pay the employer’s share of FICA tax. Proper classification of workers has been a perennial concern for employers, employees and the government. Last year, the IRS launched a national research project in which it sent thousands of audit letters to employers. The IRS signed a memorandum of understanding with the U.S. Department of Labor to share information between them to reduce misclassification.
Employers can apply for the program using Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees
Also last month, the Internal Revenue Service issued guidance designed to clarify the tax treatment of employer-provided cell phones.
The Notice provides that when an employer provides an employee with a cell phone primarily for non-compensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require record keeping of business use in order to receive this tax-free treatment.
Simultaneously with the Notice, the IRS announced in a memo to its examiners a similar approach providing cash allowances and reimbursements for work-related use of personally-owned cell phones. Under this approach, employers that require employees, primarily for non-compensated business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees’ expenses for reasonable cell phone coverage as nontaxable. This treatment does not apply to reimbursements of unusual or excessive expenses or to reimbursements made as a substitute for a portion of the employee’s regular wages. This guidance does not apply to the provision of cell phones or reimbursement for cell-phone use that is not primarily business related, as such arrangements are generally taxable.
“When you are discontent, you always want more, more, more. Your desire can never be satisfied. But when you practice contentment, you can say to yourself, ‘Oh yes — I already have everything that I really need.â€
—The Dalai Lama