Safe Harbor rules for treating an employee as an independent
There are three safe harbor provisions: judicial precedent, failure of the IRS to question the status in a prior audit, and industry practice. To qualify for Safe Harbor protection, you must satisfy just three requirements: you must have filed all required 1099-MISC forms reporting to the IRS your payments to the workers in question you consistently treated the workers involved and others doing substantially similar work as ICs, and you had a reasonable basis--that is, a good reason--for treating the workers as Independent contractors.
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