IRS Temporarily Expands Voluntary Worker Classification Settlement Program

The Internal Revenue Service (the "IRS") has intensely scrutinized the classification of workers as independent contractors as a high priority compliance initiative. One self help remedy available to taxpayers is the Voluntary Worker Classification Settlement Program ("VCSP"). The purpose of the VCSP is to permit employers who are treating some workers as independent contractors to reclassify those workers prospectively with certain protections for prior years.

Recently, the IRS announced a temporary expansion of the VCSP to taxpayers who were not originally eligible for the program. The expansion of the VCSP provides a terrific opportunity for employers with concerns over tax classification of certain workers to get a fresh start and minimize exposure for treatment of workers in prior years.