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Section 530 is a relief provision that terminates a taxpayer’s employment tax liability with respect to an individual not treated as an employee if three statutory requirements are met: 1) reporting consistency; 2) substantive consistency; and 3) reasonable basis.
For taxpayers that are uncertain whether they can meet the requirements of the safe harbor under Section 530 and prevail in challenges to their worker classifications by the IRS, the VCSP provides an opportunity to rectify past worker misclassifications at a relatively low cost.
31 gru 2006 · SECTION 530 RELIEF REQUIREMENTS. I. Reporting Consistency. First, you must have timely filed all required federal tax returns (including information returns) consistent with your treatment of each worker as not being an employee.
30 wrz 2019 · Section 530 provisions allow a business to avoid paying employment taxes if the business treated workers as independent contractors, but the IRS says they are employees. Section 530 established a safe harbor for employers.
Safe Harbors and Other Reasonable Basis Standard. The legislative history of Section 530 provides taxpayers with some help in satisfying their burden of proof in showing reasonable basis. Specifically, that legislative history indicates that the reasonable basis requirement should be construed “liberally” in favor of taxpayers.
Taxpayers that treat their workers as independent contractors may still prevail in an IRS challenge to their worker classifications and avoid retroactive employment tax assessments if they qualify for relief under Section 530 of the Revenue Act of 1978.
10 wrz 2015 · An oft forgotten weapon in a taxpayer’s armory for resolving federal tax worker classification audits is the Section 530 safe harbor. Originally enacted in 1978 in response to the Internal...
