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ARTICLE · 27 SEPTEMBER 2011

IRS Launches Voluntary Compliance Settlement Program for Misclassified Workers

Littler Mendelson
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On September 21, 2011, the Internal Revenue Service (IRS) announced that it was launching a new Voluntary Compliance Settlement Program (VCSP) that will enable emp oyers to resolve past worker classification issues by paying a small amount of tax in exchange for reclassification of contractors as employees on a forward-going basis.

United StatesEmployment and HR
William Weissman
William Weissman
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On September 21, 2011, the Internal Revenue Service (IRS) announced that it was launching a new Voluntary Compliance Settlement Program (VCSP) that will enable employers to resolve past worker classification issues by paying a small amount of tax in exchange for reclassification of contractors as employees on a forward-going basis. See IRS Announcement 2011-64.

According to IRS Commissioner Doug Shulman, "This settlement program provides certainty and relief to employers in an important area. This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations."

The VCSP is available to private employers, tax-exempt organizations and government entities. To be eligible, an applicant must:

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