Information Return Requirements for Independent Contractors

T-GGD-89-21: Published: May 16, 1989. Publicly Released: May 16, 1989.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) efforts to: (1) ensure that employers report payments made to independent contractors; and (2) detect employers who misclassify employees as independent contractors. GAO found that: (1) federal, state, and local governments, and businesses were not complying with tax reporting requirements; (2) IRS failed to identify unreported income when examining tax returns; (3) IRS did not have a systematic approach for identifying employers who misclassified workers; (4) tax revenue losses stemmed from employers not paying employment taxes and misclassified workers taking additional tax deductions that they were not entitled to; and (5) IRS did not provide revenue agents with specific procedures for assessing compliance, since such other issues as overstated deductions had higher priority during tax return examination. GAO believes that: (1) IRS needs to systematically improve its enforcement of employer income filing and use tax returns to identify employers who misclassify employees; and (2) statutory provisions should be modified to allow IRS to reclassify workers in future tax years.

Jan 30, 2018

Dec 20, 2017

Dec 18, 2017

Nov 30, 2017

Nov 28, 2017

Sep 6, 2017

May 18, 2017

May 17, 2017

Apr 27, 2017

Apr 26, 2017

Looking for more? Browse all our products here