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Navigating the Choppy Waters of Employment Tax Laws


2011 sees numerous employment acts due to come into force, including the Patient Protection and Affordable Care Act, the Wall Street Reform and Consumer Protection Act, the Tax Relief and Health Care Act and the Small Business Jobs Act. Taxand US discusses the implications of these employment tax issues on businesses.

February 2010 saw the Internal Revenue Service (IRS) commence the Employment Tax National Research Project (ETNRP), where companies have been selected at random, whilst focusing on smaller employees in select industries. The project concentrates on the following:

  • Worker classification
  • Fringe benefits
  • Executive compensation
  • Payroll taxes

Taxand's Take

How can companies prepare for the Employment Tax National Research Project?
  • Review non-qualified deferred compensation arrangements to ensure they comply with 409A
  • Prepare for an employment tax audit
  • Ensure information concerning your 1099 is in order
  • Track down equity reporting information

Even if you are not one of the randomly selected companies for the Employment Tax National Research Project, the IRS will be using the information gathered to more effectively target companies in the future. It is imperative that companies perform an internal review and ensure that best practices are being employed.

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Your Taxand contact for further queries is:
Brian Cumberland
T. +1 214-438-1013

Taxand's Take Author