IRS Watchdog Calls for Changes To Better Serve Companies

, Legal Times

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The Internal Revenue Service office that answers personnel-classification questions from companies and workers needs more staffers and a self-help website for the public to help reduce a backlog of thousands of cases and lessen taxpayer hardship, National Taxpayer Advocate Nina Olson said in her annual report to Congress.

As of November, the SS-8 Unit of the IRS had about 11,545 cases in which it had yet to determine whether a worker is an employee or an independent contractor, said Olson, who released her report Thursday. Of those cases, more than 81 percent have waited at least six months for decisions, leaving unanswered questions about income tax withholding obligations, employment tax liabilities and other tax issues.

"The delay in classification of workers as employees or independent contractors by the IRS' SS-8 Unit has significant tax consequences for businesses and individuals," said Olson, who listed the matter among the "most serious problems encountered by taxpayers."

Affiliate publication Corporate Counsel has more.

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