A Denver business attorney at The McGuire Law Firm can assist business owners in correctly categorizing a person performing work for his or her business as an employee or an independent contractor. Failure to make the correct determination based on the law can lead to claims by the person performing the work, and by taxing authorities such as the IRS and the Colorado Department of Labor and Employment, which can lead to state and federal tax liabilities.
Both agencies, the IRS and the Colorado Department of Labor and Employment, use a factor test to determine how the business should classify the person, as an employee or as an independent contractor. A Denver business attorney at The McGuire Law Firm will assist our clients with this analysis and with drafting necessary documentation. As a tax attorney we have also seen the consequences of improperly classifying a person as an independent contractor as opposed to an employee. This mistake can cost a business time and money. The money includes taxes, up to four types of penalties and interest.
A Denver business attorney at The McGuire Law Firm will walk you through the factors to make the correct determination, and draft documentation. If your business has already improperly classified workers, The McGuire Law Firm will also walk you through the IRS’ voluntary disclosure program to mitigate the impact of the employment tax liability.