The IRS and the states are aggressively attacking this area. They believe this area provides a great opportunity for them to reduce the tax gap.
Certain industries with a history of misclassification are being targeted: trucking, construction, restaurants, grocery stores, janitorial, business services, child care, poultry and meat processing, landscaping and home healthcare. But any company that issues a large number of 1099s or has a relatively large percentage of independent contractors versus employees has higher potential for audit.
If you are contacted by the IRS or any state for this type of audit, please contact me at [email protected] for assistance.