Correcting a Misclassification Before It Becomes a Major Expense
Customer: A Silicon Valley Software Company
While reviewing its independent contractors, a software company discovered an independent contractor who could not legally claim independent status. Without any supporting documentation, the worker filed a simple IRS Form SS-8 – a document that companies and potential ICs complete to get a determination from the IRS. In this instance, the worker wanted IC status and to achieve it misrepresented both the structure of the business and the nature of the work he performed. Not seeing the whole picture, the IRS supported his claim and the company was facing misclassification penalties.
Fearing costly legal bills or retribution from the IRS, most companies simply pay the misclassification penalties. In this case, ZeroChaos found:
The ZeroChaos Solution:
With our experience and expertise, ZeroChaos isn’t afraid to stand up to government agencies on our customers’ behalf when they’ve made a potentially costly mistake.