Discussion:Section 530 Relief
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| Revision as of 21:08, 15 December 2005 Tdoyle (Talk | contribs) (New Discussion) ← Previous diff |
Revision as of 21:14, 3 July 2008 Sheldon (Talk | contribs) (Section 530 industry independent contractor evidence?) Next diff → |
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| {{ForumNewPost|UserID=Tp46|Date=15 December 2005|Text=Has anyone had any luck claiming section 530 relief based on reasonable basis that construction industry has long standing practice of using subcontractors and not employees? Am currently going through IRS audit, and agent wants to reclassify subs to employees. Business is construction related, installing kitchen updates, windows, etc and they contract with Lowes. They have always filed 1099's for subs, have never treated them as employees. I brought up section 530 to agent, but she said construction industry does not qualify, The agent offered a CSP agreement which basically will charge tax on one year only and give immunity for 2004 & 2005, with no interest or penalties. Shoud I take the offer or appeal?}} | {{ForumNewPost|UserID=Tp46|Date=15 December 2005|Text=Has anyone had any luck claiming section 530 relief based on reasonable basis that construction industry has long standing practice of using subcontractors and not employees? Am currently going through IRS audit, and agent wants to reclassify subs to employees. Business is construction related, installing kitchen updates, windows, etc and they contract with Lowes. They have always filed 1099's for subs, have never treated them as employees. I brought up section 530 to agent, but she said construction industry does not qualify, The agent offered a CSP agreement which basically will charge tax on one year only and give immunity for 2004 & 2005, with no interest or penalties. Shoud I take the offer or appeal?}} | ||
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| + | {{ForumReplyPost|UserID=Sheldon|Date=3 July 2008|Text=TP46: You no doubt got through this issue of 2.5+ years ago, but perhaps more of us could learn from your experience. I have a client in a situation where the employee challenged the independent contractor status, even though they had signed an agreement to that effect and the IRS ruled against my client. Initially thought we would pay some payroll taxes. When I calculate that for 3 years, it is an amount that the client thinks would put him out of business and he doesn't want to go ahead with changing all of that to employee status. My understading is that you then wait to see if the IRS challenges the employer after this ruling. The client indicated in his industry (Radon testing and improvements) the workmen's compensation insurance had no history / record of employees in this industry. He had also always said that he knew of others in his industry that were treating workers as independent contractors. Is this anything to go on to indicate that the employer / payor / taxpayer was relying on proper evidence to dispute any changes that the IRS would propose in a section 530 case. I do hope that my taxpayer's experience is no worse than what Tp46 experienced with only one year being changed. The taxpayer is treating new workers as W-2 employees, so it should not be an issue for the future.}} | ||
Revision as of 21:14, 3 July 2008
Discussion Forum Index --> Tax Questions --> Section 530 Relief
| 15 December 2005 | |
| Has anyone had any luck claiming section 530 relief based on reasonable basis that construction industry has long standing practice of using subcontractors and not employees? Am currently going through IRS audit, and agent wants to reclassify subs to employees. Business is construction related, installing kitchen updates, windows, etc and they contract with Lowes. They have always filed 1099's for subs, have never treated them as employees. I brought up section 530 to agent, but she said construction industry does not qualify, The agent offered a CSP agreement which basically will charge tax on one year only and give immunity for 2004 & 2005, with no interest or penalties. Shoud I take the offer or appeal? | |
| 3 July 2008 | |
| TP46: You no doubt got through this issue of 2.5+ years ago, but perhaps more of us could learn from your experience. I have a client in a situation where the employee challenged the independent contractor status, even though they had signed an agreement to that effect and the IRS ruled against my client. Initially thought we would pay some payroll taxes. When I calculate that for 3 years, it is an amount that the client thinks would put him out of business and he doesn't want to go ahead with changing all of that to employee status. My understading is that you then wait to see if the IRS challenges the employer after this ruling. The client indicated in his industry (Radon testing and improvements) the workmen's compensation insurance had no history / record of employees in this industry. He had also always said that he knew of others in his industry that were treating workers as independent contractors. Is this anything to go on to indicate that the employer / payor / taxpayer was relying on proper evidence to dispute any changes that the IRS would propose in a section 530 case. I do hope that my taxpayer's experience is no worse than what Tp46 experienced with only one year being changed. The taxpayer is treating new workers as W-2 employees, so it should not be an issue for the future. | |
