Miami Accounting Firms and Internal Revenue Service are casting a skeptical eye on many companies’ attempts to classify employees as independent contractors.
Miami Accounting Firms say the IRS “focuses on the withholding, the FICA taxes, Medicare taxes,” said Gustavo Viera CPA, partner-in-charge Miami Accounting Firm, during a Florida Society of CPAs conference Thursday on taxation for individuals. “They’re drilling down on compensation, on withholding. They come prepared and they do their work. These agents can have files with a tremendous amount of documentation.”
It’s not only low-level staff who can be the subject of such audits. High-level executives can also come under scrutiny. Miami Accounting Firms warned about golden parachute issues. “If you take an excess parachute payment, there’s an excise tax on the employer and on the executive,” he cautioned. “They look at non-cash fringes like housing, loans, gross-ups to cover certain tax payments they have to make. There’s a lot going on here that the agents are looking at.”
Viera noted that Miami Accounting Firms can do the planning for their clients, helping them update their processes and procedures. He advised checking the payroll system for temps, alternative workers, and contingent workers.
“When you have a contract with someone that says they’re going to be treated as an independent contractor, that is not enough,” he said. “You have to drill down. The contracts are getting more specific. You have to look at the written documents and at the actual work.”
Miami Accounting Firms and IRS Looking Closely at Independent Contractors
Tax preparation want you to know that identity theft often starts outside of the Tax preparation Miami system when someone’s personal information is stolen or lost