Skip to main content

Tax Administration: Approaches for Improving Independent Contractor Compliance

GGD-92-108 Published: Jul 23, 1992. Publicly Released: Jul 23, 1992.
Jump To:
Skip to Highlights


Pursuant to a congressional request, GAO reviewed the tax administration effects of the Internal Revenue Service's (IRS) Employment Tax Examination Program, focusing on examining small business compliance using the common-law rules for classifying workers as either employees or independent contractors.

Skip to Recommendations


Matter for Congressional Consideration

Matter Status Comments
Congress should establish clear rules for classifying workers, as GAO recommended in its 1977 report.
Closed – Not Implemented
Legislative proposals for clarifying the rules have been raised from time to time. The last time was summer 1997. Congress did not enact the proposal. Given the age of this recommendation and the lack of any congressional action on proposed legislation, GAO is closing this recommendation.
Congress should consider legislation to improve independent contractor compliance through withholding or improved information reporting.
Closed – Not Implemented
GAO has not seen any legislative proposals on this issue since 1996. Given the age of the recommendation and lack of congressional action, GAO is closing this recommendation.

Full Report

Office of Public Affairs


Case lawContractor paymentsContractorsNoncomplianceReporting requirementsTax administration systemsTax evasionTax lawTax nonpaymentIndependent contractors