If you’re a contractor, be sure you have a good accountant. When budgets get tight, governments look for new revenue opportunities – and enforcing the rules about independent contractors is beginning to look very, very green to agencies like the Internal Revenue Service. And I don’t mean green in save-the-world way. I mean in a $7-billion-over-10-years way.
The administration’s budget proposal would terminate a rule that lets employers classify long-term employees as contractors. Plus, it adds 100 people to help the IRS find “temporary” workers who are, actually, full-timers. In the grand scheme of things, 100 staffers isn’t a lot of people. But the IRS recently launched an initiative to audit 6,000 companies over the next three years looking for this type of “misclassification.” All this activity is targeting small businesses and the -employed. That could include, well, you.
Oh, federal and state agencies are at work linking their computer systems – the better to share date with each other. So this net is just going to get wider.
Now may be a good time to review the basics of book-keeping for the self-employed.
— Mark Feffer