The Wilson Firm Saved $1.1 Million in Worker Reclassification Audit Case

The Wilson Firm's client was audited by the IRS regarding its payroll tax obligations from 2017 to 2021. The core issue was the classification of its workers: whether they should be considered employees or independent contractors.

The Wilson Firm appealed the IRS's initial decision. After nearly a year of advocating for the client, IRS Appeals issued its ruling on May 16, 2024. Appeals determined that none of our client’s workers should be reclassified as employees. This decision not only saved our client over $1.1 million in potential payroll tax liabilities but also prevented the need to reclassify these workers as employees going forward, which would have forced our client to close their business permanently.

This case was a huge win for our client, and a significant milestone for our firm. It underscored the importance of clear contractual relationships and the autonomy of subcontractors in determining employment status. If you are in a similar situation during or after an IRS audit, contact the attorneys at The Wilson Firm so we can use our expertise and experience to help you navigate the aggressive tactics of the IRS.