Regulations and Government
NBAA: IRS Intensifies Scrutiny of Misclassified Workers
GAO says misclassified workers are costing the IRS $4 billion a year in lost tax revenue.

According to NBAA, IRS officials recently indicated the agency plans to intensify audits of companies for improperly classifying employees as independent contractors, which could include contract pilots frequently used by corporate flight departments. The independent contractor issue is so concerning and complicated that NBAA issued a Best Practices for Utilizing Independent Contractors guide for business aircraft operators in 2011. Because contractor wages are not subject to tax withholding, the Government Accountability Office estimates that misclassified workers are costing the IRS $4 billion in lost tax revenue each year.