1099’s must be independent in appearance and in fact.

The government loses millions of dollars a year in unpaid employment taxes because of misclassified workers. The IRS is now aggressively working on the solution. They have increased their examinations of business that use independent contractors. They should also look at policing Medicare fraud but let me not digress.

Likely candidates for these examinations are businesses that employ commissioned salespeople, delivery personnel, health care providers and construction workers. There are many circumstances where the independent contractors are properly classified however the taxpayer is best served if they have an advocate working on their behalf.

If you have independent contractors in your business now is a good time to review the business relationship and be sure you are in compliance with the rules.