THE IRS IS SEEKING TO ENCOURAGE MISCLASSIFIED EMPLOYEES TO SQUEAL ON THEIR EMPLOYERS

By Timothy K. Cutler

 

The IRS is seeking to encourage misclassified employees to squeal on their employers.  The IRS accomplishing this through the use of IRS Form 8919, which is to be completed by those who are paid as a 1099 employee/worker but believe that they should have been paid as W-2.  

Inevitably there will be numerous instances when an 1099 employee/worker will not have the money to pay his/her taxes at the end of the year and will claim, rightfully or wrongly, that s/he was misclassified and that his/her employer is responsible for payment of employment related taxes.  Alternatively, the employee/worker will misunderstand the form or s/he will feel that they otherwise should have been classified as a W-2 employee and thus will complete the form indicating that they were misclassified.

The likely outcome from a employee/worker completing and filing Form 8919 with the IRS stating that s/he was misclassified is that the IRS will audit the employer for misclassification of employees and failure to pay employment related taxes. The Attorney General for the state in which the employee/worker was employed could also be notified and could investigate and fine the alleged offending employer.  

The use of this form is part of the growing trend of Federal and State governments to crack down on the misclassification of employees/workers.