Clifford N. Ribner, a tax attorney in Tulsa, Okla., discusses how employee classification disputes with the IRS can drastically affect businesses.
Tulsa, Okla. (PRWEB) February 24, 2008 -- Employee classification disputes can seriously harm a business. For an example, one only has to look at FedEx, a major national shipping company that has been embroiled in an employee classification dispute for some time.
FedEx claims that the drivers in its ground division are independent contractors. However, some of the drivers - and the IRS - say that they are employees instead. If that's the case, then FedEx could owe a lot of money to the government.
Clifford N. Ribner (http://www.cnribneratty.com), a tax attorney in Tulsa, Okla., discusses how employee classification disputes like these can drastically affect businesses.
"The IRS is extremely aggressive about employee classification and collecting payroll taxes," Ribner said. "They sometimes grab a bank account -- especially a payroll account -- before they show up, just to get your attention. Unfortunately, employment tax controversies can cost huge dollars, and they can literally make or break a business."
According to Ribner, the IRS wants payers to withhold taxes at the paycheck source. If they can't get one person to pay, they will go after another. For example, if a freelancer doesn't pay his taxes, the IRS will turn to those who hired him. For them, Ribner says, this is the easiest avenue for collecting.
Making it worse for business owners and employers is the ambiguity of whether people are independent contractors or employees. Employee classification disputes can potentially arise with almost anyone a business hires.
"You may think that they guys that bring their own tools to work are independent contractors, but it can actually be unclear as to whether they're independent contractors or employees," Ribner said.
Ribner recommends that employers consult with a tax attorney during the planning stages of their business. That way, they can ensure that independent contractors and employees are classified correctly from the start, reducing the risk of an employee classification dispute with the IRS.
"A tax attorney can discuss the options available in this regard, so you can set up your business to maximize your ability to claim you have independent contractors, rather than employees, working for you," Ribner said.
To learn how to protect yourself and your business from employee classification disputes, visit Ribner online at http://www.cnribneratty.com
About
Clifford N. Ribner is a tax attorney with more than 28 years of specialized tax law experience. His practice in Tulsa, Oklahoma, is limited to taxation, and he has helped many clients over the years in their battles with the IRS.
Press release provided by Xeal Inc. (http://www.xeal.com)
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