The big reason that the IRS likes W-2 employees over 1099 is that the tax withholding comes out before the money goes to the employee. Easier to collect, more reliable and the money sits in the government coffers. With 1099, they are relying upon the tax payer to save up the money they'll owe in taxes and then properly report things on their Schedule C.
I don't know if states are taking action without a complaint but I do know that after the class action suit against Microsoft several years back, companies are trying to be much more careful about properly classifying their workers. The financial downside if you get caught can be pretty gnarly. Judah On Fri, Jul 22, 2011 at 6:51 AM, Cameron Childress <[email protected]> wrote: > > On Fri, Jul 22, 2011 at 1:15 AM, Eric Roberts < > [email protected]> wrote: >> >> Many states are cracking down on this because companies are trying to avoid >> employment taxes. A former company I worked for did that. > > > Even though the company doesn't pay them, the contractor does. But the IRS > would much rather deal with getting money from one company than from 30, or > 300, or 3000 contractors. Still though - I am not sure they actively go > after folks, more like something found in a routine audit. I may be wrong. > > Most of thew court cases I have heard of were brought on by disgruntled > contractors. Are states taking action without a complaint from a worker? > > -Came ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:340746 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
