The Internal Revenue Service apparently is using innovative and creative ways to reach out to taxpayers. Recently, the IRS released a YouTube video introducing its Voluntary Classification Settlement Program (“VCSP”). The video is aimed at employers who may be uncertain as to whether their workers should be treated as employees or contractors for federal employment tax purposes (specifically, federal income tax withholding, Federal Insurance Contributions Act and Federal Unemployment Tax Act taxes). The video, which is just under two minutes in length, is a high-level overview of the VCSP. The video reminds employers that the IRS’ VCSP is available to provide relief to employers who want to voluntarily reclassify non-employee workers as employees on a prospective basis.
To qualify for the relief, the video states that an employer: (1) must have treated workers consistently as contractors or non-employees; (2) must have filed 1099 forms for such workers; (3) cannot be under audit currently by the IRS; and (4) cannot be under audit currently by the U.S. Department of Labor or a state agency with respect to the classification of workers. (Note: IRS Form 8952 expands upon these criteria.)
Employers interested in utilizing the VCSP may apply for relief by using IRS Form 8952, which is available on the IRS website at http://www.irs.gov/pub/irs-pdf/f8952.pdf.