Independent Contractor Classification Tip #7

Posted by Liz Greene

Ready for independent contractor classification tip #7? Here it is:

Maintain electronic records on each independent contractor for instant audit defense.

You or your 1099 compliance vendor should maintain an electronic compliance file on every independent contractor you engage. Check to find out if your compliance firm actually has the defense files with all supporting documentation and can produce them quickly should you ever be subjected to a contractor audit by the IRS or another regulatory agency. If you already have a compliance program in place, don’t be afraid to spot check frequently; request a few randomly selected contractor compliance files and evaluate them for completeness.

Tags: independent contractor, classification, compliance