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IRS Expands Voluntary Worker Classification Settlement Program
Practical Law Legal Update 5-524-5330 (Approx. 3 pages)
IRS Expands Voluntary Worker Classification Settlement Program
by PLC Labor & Employment
| Published on 28 Feb 2013 • USA (National/Federal) |
The Internal Revenue Service (IRS) has announced that it has expanded its Voluntary Classification Settlement Program (VCSP), making it possible for many more interested employers to apply. To achieve this expansion, the IRS is modifying the eligibility requirements to allow employers under an IRS audit to qualify for the VCSP, to reduce the special six-year statute of limitations, and to temporarily waive the requirement that employers must have filed required Forms 1099 for workers they wish to reclassify.
On February 27, 2013, the IRS announced that it has expanded its Voluntary Classification Settlement Program (VCSP), making it possible for many more interested employers to apply for the program. To achieve this expansion, the IRS is making the following modifications to the eligibility requirements:
- Employers under an IRS audit, other than an employment tax audit, can qualify for the VCSP.
- Employers accepted into the program will no longer be subject to a special six-year statute of limitations (which had been adopted in place of the usual three years applicable to payroll taxes).
- Until June 30, 2013, the IRS is waiving the requirement that employers must have filed required Forms 1099 for all workers they are seeking to reclassify for the past three years.
For more information about these and other permanent modifications to the VCSP, see IRS Announcements 2012-45 and 2012-46, and in the Frequently Asked Questions posted on the IRS website.
For more information on the VCSP, see the following Legal Updates: