This article provides an update on information previously reported in our Winter 2012 Issue
In December 2012, the IRS issued Announcement 2012-51 temporarily expanding the VCSP to taxpayers who did not file the required Forms 1099 for the past three years but would otherwise be eligible for the program. Under the temporary eligibility expansion program (VCSP TEE), the taxpayer will pay a higher tax than under the VCSP (12.91% and 5.03% instead of 10.28% and 3.24%) and a reduced penalty for the unfiled Forms 1099 for the past three years. Otherwise the benefits of both programs are the same. To participate in the VCSP TEE, an application must be submitted on or before June 30, 2013.
If you have workers or a class of workers that you are currently treating as independent contractors and are not totally confident of this classification, you may want to review the relationship and consider the VCSP or VCSP TEE as applicable.