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ARTICLE · 06 OCTOBER 2011

IRS Announces New Voluntary Worker Classification Settlement Program

Duane Morris LLP
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In Announcement 2011-64, the Internal Revenue Service (IRS) on September 21, 2011, provided notice and details regarding a new Voluntary Classification Settlement Program (the "VCSP"), which provides partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat workers as employees.

United StatesEmployment and HR
W. Michael Gradisek
W. Michael Gradisek
Timothy Collins
Timothy Collins
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To be eligible for participation in the VCSP, a taxpayer must have consistently treated the workers as non-employees; the taxpayer must have filed all required Forms 1099 for the workers for the previous three years; and the taxpayer cannot currently be under audit by the IRS or under audit concerning classification of the workers by DOL or by a state government agency.

In Announcement 2011-64, the Internal Revenue Service (IRS) on September 21, 2011, provided notice and details regarding a new Voluntary Classification Settlement Program (the "VCSP"), which provides partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat workers as employees. To participate in the VCSP, the taxpayer has to meet certain eligibility requirements that are outlined below, apply to participate in the VCSP and enter into a closing agreement with the IRS.

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