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ARTICLE · 28 MAY 2013

IRS To Increase Worker Classifications Cases Referred By States

McGuireWoods LLP
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Under memoranda of understanding (MOUs) that IRS has with 37 states, IRS and state workforce agencies (SWAs) are permitted to: (1) exchange audit reports; (2) exchange audit plans; (3) participate in side-by-side examinations, when appropriate; (4) receive information; and (5) participate in reciprocal sharing of information.

United StatesTax
Douglas Charnas
Douglas Charnas

Under memoranda of understanding (MOUs) that IRS has with 37 states, IRS and state workforce agencies (SWAs) are permitted to: (1) exchange audit reports; (2) exchange audit plans; (3) participate in side-by-side examinations, when appropriate; (4) receive information; and (5) participate in reciprocal sharing of information. After IRS conducts a worker classification examination that results in the misclassification of an employee as an independent contractor, it determines whether information regarding the examination should be forwarded to the appropriate SWA. SWAs make a similar determination when they conduct an employment examination. Since 2004, IRS has been using information received from states to identify potential candidates for employment tax examinations.

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