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Eligibility for Voluntary Classification Settlement Program

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As discussed in an earlier article, I already explained the essence of a new Voluntary Classification Settlement Program (“VCSP”) announced by the IRS earlier this week. I then explored the application process. In this essay, I would like to explore the general eligibility requirements for the VCSP.

Generally, the VCSP is available for to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

In order to be eligible for the VCSP, a taxpayer must meet three requirements.

First, the applicant must have consistently treated its workers in the past as nonemployees.

Second, the applicant must have filed all required Forms 1099 for the workers for the previous three years.

Finally, the third requirement is that the applicant cannot currently be under audit by the IRS, the Department of Labor, or any other state agency concerning the classification of these workers. Note that a taxpayer who was previously audited by the IRS or the Department of Labor concerning the classification of the workers will only be eligible if the taxpayer has complied with the results of that audit.

Contact Sherayzen Law Office NOW to Obtain VCSP Representation

If you wish to participate in the VCSP, you should contact Sherayzen Law Office immediately. Our experienced tax firm will rigorously represent your interests during the entire process of the Voluntary Classification Settlement Program and strive to achieve the most satisfactory and efficient resolution of your case.

Application Process for Voluntary Classification Settlement Program

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As was discussed in an earlier article, the IRS announced a new Voluntary Classification Settlement Program that offers concrete benefits to participating employers. Among the chief benefits are substantially lower payment by employers of the potentially overdue taxes (without any interests and penalties) and a relatively simple way of resolving this potentially grave problem. Additional benefits also include limited audit protection.

Eligible taxpayers who wish to participate in the VCSP must submit an application for participation in the program. Along with the application, the employer should provide to the IRS the name of its tax attorney (or an authorized representative) with a valid Power of Attorney (Form 2848). The IRS will contact the attorney to complete the process once it has reviewed the application and verified the taxpayer’s eligibility. Taxpayers whose application has been accepted will enter into a closing agreement with the IRS to finalize the terms of the VCSP and will simultaneously make full and complete payment of any amount due under the closing agreement.

It is important to emphasize that the IRS retains discretion whether to accept a taxpayer’s application for the VCSP. This is why it is important for the taxpayer to retain a competent tax attorney to represent him, even if this is an out-of-state attorney.

Contact Sherayzen Law Office for VCSP Representation

If you wish to participate in the VCSP, you should contact Sherayzen Law Office immediately. Our experienced tax firm will guide you through the entire process of Voluntary Classification Settlement Program and strive to achieve the most satisfactory and efficient resolution of your case.