United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-08-02 monographic deposited born digital GA 1.13:T-GGD-95-224 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-95-224 P0b002ee180372a3f f:tgg95224 DGPO 2010-08-12 2011-03-23 GAOREPORTS-T-GGD-95-224 machine generated eng fdlp REPORT GAOREPORTS-T-GGD-95-224 T-GGD-95-224 Personnel classification Contractors Reporting requirements Tax law Tax return audits Income taxes Liability (legal) Tax administration Noncompliance Taxpayers IRS Employment Tax Examination Program Testimony GGD Ensuring the appropriation classification or workers for federal tax purposes--either as employees or independent contractors--have been of longstanding concern to GAO. This testimony makes four central points. First, the common law rules used by the Internal Revenue Service (IRS) for classifying workers remain as unclear and subject to conflicting interpretation as GAO found them in 1977. Second, although it recognizes this ambiguity, IRS feels responsible as the nation's tax administrator to enforce tax laws and rules. Third, in addition to classification rule clarification and compliance audit, GAO believes that two other approaches could help improve independent contractor compliance--(1) require businesses to withhold taxes from payments to independent contractors and (2) improve business compliance with the requirements to file information returns on payments to independent contractors. Fourth, aside from tax issues, changes to the classification rules must take into account the body of law that creates a safety net for American workers. Many laws apply only to employees and do not protect workers classified as independent contractors. A byproduct of classification rule clarification could be a change in the number of workers considered to be independent contractors. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-GGD-95-224/html/GAOREPORTS-T-GGD-95-224.htm GAO/T-GGD-95-224 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-95-224 Testimony GAO/T-GGD-95-224; Tax Administration: Issues Involving Worker Classification; Personnel classification Contractors Reporting requirements Tax law Tax return audits Income taxes Liability (legal) Tax administration Noncompliance Taxpayers IRS Employment Tax Examination Program