IRC section 3509
provides that if an employer fails to deduct and withhold any tax under chapter
24 (income tax withholding) or subchapter A of Chapter 21 (employee portion of
FICA) with respect to any employee by reason of treating an employee as not
being an employee, the employer's liability is 1.5 percent of the employee's
wages plus 20 percent of the employee's portion of the FICA tax. The employer's
liability is doubled in cases where the employer failed to meet the reporting
requirements of IRC section 6041(a) or IRC section 6051 consistent with the
treatment of the employees as independent contractors.
IRC section 3509(c)
provides that the reduced rates of IRC section 3509 do not apply in cases of an
employer's intentional disregard of the requirement to deduct and withhold such
tax.
IRC section
3509(d)(1)(C) provides that if the amount of liability for tax is determined
under 3509, then sections 3402(d) (regarding credit for tax paid by the worker)
and 6521 (regarding offset for payment of SECA tax) do not apply. IRC section
3509(d)(2) provides that section 3509 rates do not apply where the employer
withholds income tax withholding but not FICA.
No comments:
Post a Comment