Independent contractor arrangements and IRS audits

As government auditors begin their challenges, nurse executives need to review their operations to remove any potential audit risks. Although a common practice for many institutions, the use of independent contractor arrangements may be ruled inappropriate. As a result, many individuals may be reclassified as employees, leading to Internal Revenue Service (IRS) assessments of penalties and back payroll taxes. It always is prudent to anticipate IRS actions and shore up any areas that may lead to tax assessments before they are imposed on the institution.