The IRS Forgives You

If you're a business owner who may have mistakenly categorized your employees as contract workers, the IRS is offering a deal that can erase 90 percent of any taxes that might be owed.

And there would be no penalties or interest levied under what the IRS calls its Voluntary Classification Settlement Program, a quasi-tax amnesty plan. In addition to the amnesty, workers who are reclassified would receive audit protection for past years.

While the IRS program expires in June, it's not too early to investigate. Business owners can learn more about this offer and other aspects of reclassifying workers at a March 19 seminar at the Hagerty Center.

"This seminar will address all aspects of the employer's classification of their workforce," said Deb Vogel, business liaison for Northwest Michigan Works. "We'll examine the distinction of the independent contractor versus employee status from the IRS legal perspective. Exempt [salaried] versus non-exempt [hourly] will also be reviewed with an eye toward helping the employer stay compliant. "

"I think recently, with the local economy not so stable, some employers may have mistakenly classified some of their employees as contract workers," Vogel said. "They're not trying to evade tax obligation, but they may just not be knowledgeable about the employee versus contract worker differences."

Those who hire seasonal workers and construction crews are two types of employers who might benefit from the program, she said.

Two expert speakers will offer advice during the three-hour seminar. Keynote Susan Rahn from the Grand Rapids-based IRS Stakeholder Division will explain the settlement program. Mike McPherson from HR4U will explain exempt versus non-exempt workers.

The event is sponsored by the Employer Training Council, a non-profit group of public and private industry that is committed to identifying key workforce issues and offering solutions to businesses through training and workshops. ETC members include Northwest Michigan Works, Northwest Michigan Council of Governments, Grand Traverse Container, Alcotec Wire and the Benzie Chamber of Commerce.

The March 19 seminar will be held at the Hagerty Center. Registration is $40 for the session, which runs from 9 a.m. to noon. To register, call Lisa Schut at 231-929-5081.

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