Reference no: EM133751471

Question: Worker Classification

In general, when a worker classification problem arises a company needs to decide on how to address it as the consequences of failure to do so can be financially devastating to the company. There are currently a few different methods to address a possible worker classification issue:

1. Do nothing and hope for the best. If examined attempt to fall under the Classification Settlement Program.

2. Make modifications to classification on a going forward basis but not advise the IRS of the change (stealth change) and hope for the best.

3. Attempt to fall under Section 530 relief provisions.

4. Enter the Voluntary Classification Settlement Program.

Below you will find a set of facts with respect to Miami Business Services, Inc. In Addition, an employee census is provided as well as a completed form SS_8, "Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding." You are to write a memorandum to answer question#1, no more than 3 pages. You have been asked to write a memorandum to Miami Business Services, a new client, to advise them of the best course of action with respect to correcting the worker classification issue that has arisen. Your memo should cover:

1. Does the company have a worker classification issue? If so, describe why.

2. Which of the workers are subject to reclassification as employees?

3. What are the available options?

4. Which option do you recommend and why do you feel it is superior to other options?

5. What are the requirements to qualify for the recommended option?

6. Based on the option you choose, what needs to be done going forward, if anything?

7. In making your recommendation you should consider not only the current cost but the ongoing cost of your recommendation.