Heed IRS warnings about independent-contractor errors

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in Compensation and Benefits,Human Resources

The IRS issued a fact sheet this summer to remind employers to correctly classify workers as either independent contractors or employees. (IRS FS-2006-21) The main factor in making that decision: control.

The more control you have over the "when, where and how" of workers' job performances, the more likely the worker would be classified as a common-law employee for whom you must withhold and pay federal taxes. Misclassification can lead to big-time back taxes and penalties. 

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