If there is one thing a small business owner does not need, it is hassles beyond that of just struggling to make a living. The IRS is so intent on auditing and penalizing small business, they have developed special audit task forces to audit various business segments. For example, waitresses and waiters are prime targets for audit. One of the most favorite audit targets of all is multi-level marketers like Amway and Shaklee distributors. When to use independent contractors Independent contractors can be a great resource for small businesses who need help on a part-time basis.
Independent Contractors can provide that help.
However, in recent years, the IRS has cracked down tremendously on the use of independent contractors. For example, an artist may work for an advertising agency upon demand. If at any time that artist begins to work exclusively for the agency on a full time basis, that artist must be made an employee. If the artist works exclusively for the agency even on an part-time basis over an extended period of time, a requirement to make the artist an employee may develop in this case as well. 2 - An IC must be allowed to work on his or her own clock.