The IRS has made significant changes to its Voluntary Classification Settlement Program (VCSP), now allowing employers who pay a larger portion of their past due tax to participate in the VCSP. IRS Announcement 2012-46.
Under the VCSP, employers can reclassify workers currently treated as independent contractors as employees. To participate, employers must have filed all required Forms 1099. Employers then submit an application and agree to treat the workers as employees for federal employment tax purposes in future tax periods. Employers also agree to extend the statute of limitation to assess employment taxes for three years for each of the three calendar years beginning after the date of the agreement.
The new announcement allows employers who have not filed Forms 1099 to now participate in the VCSP. Employers accepted must issue to their workers any delinquent 1099s. Employers will also pay 25% of the current employment tax liability, instead of the original VCSP amount of 10%. Employers also need not agree to extend the statute of limitation on employment tax assessment.
Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.