March 4, 2013 | Back to: News

Revenooer Rants: IRS unemployment - after April 15

INCLINE VILLAGE, Nev. - You can count on the IRS to do its share with respect to sequester savings - but not until April 15 comes and goes.

We hear IRS plans to require five to seven days of unpaid leave for a bunch of its employees through September of this year. "If sequestration occurs, we will continue to operate under a hiring freeze, reduce funding for grants and other expenditures, and cut costs in areas such as travel, training, facilities and supplies," said IRS Acting Commissioner Steven Miller recently. "In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded."

And here's one for you - Treasury Department Deputy Secretary Neal Wolin told Congress in early February that, "The cuts to operating expenses and expected furloughs would prevent millions of taxpayers from getting answers from IRS call centers and taxpayer assistance centers and would delay IRS responses to taxpayer letters."

So what the heck else is new, we say!

Nonetheless, while they still have a few staff members hanging around, IRS announced last week that it will be expanding its "Voluntary Worker Classification Settlement Program" (VCSP), thus allowing for more taxpayers to take advantage of this opportunity to achieve some certainty under the law by reclassifying their workers as employees, rather than independent contractors.

So far, something like 1,000 employers have applied for the VCSP, which provides partial relief from federal payroll taxes for eligible employers who are treating their workers as independent contractors.

Under the new version of the program, employers under IRS audit, other than an employment tax audit, can qualify for the VCSP, and if accepted into the program will no longer be subject to a special six year statute of limitations, rather than the usual three year statute.

In general, employers are barred from the VCSP if they failed to file required Forms 1099 with respect to workers they are seeking to reclassify for the past three years. However, for the next few months - until June 30, 2013 - IRS will waive this eligibility requirement.

Check out Form 8952, "Application for Voluntary Classification Settlement Program" if you want to join the VCSP.

- CONSULT YOUR TAX ADVISER - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation. Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.

Jeff Quinn
Special to the Bonanza


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Tahoe Daily Tribune Updated Mar 4, 2013 03:54PM Published Mar 4, 2013 03:54PM Copyright 2013 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.