Employment taxes affect campgrounds and RV parks just as they do most other small businesses. Work campers may have the idea that they may help at a park, trading labor for campsite, without being an employee. The IRS may see it differently.
The Federal Insurance Contributions Act (FICA) requires employers to withhold federal income, Social Security, and Medicare taxes. The Federal Unemployment Tax Act (FUTA) requires the collection of federal unemployment taxes.
Employers who pay employees cash under the table or who call their employees "independent contractors" to avoid paying employment taxes may soon be under stricter scrutiny. This is according to a press release from the National Federation of Independent Business Small Business Legal Center. The news release states that the head of the U.S. Justice Department's Tax Division has warned a group of tax attorneys that the IRS and DOJ will aggressively pursue unpaid employment taxes.
The news release indicates the DOJ and IRS will be going after employees using unsophisticated schemes that make them easy targets for enforcement. So, in addition to civil methods to recover unpaid employment taxes, there may be criminal enforcement as well.
Campground and RV park owners who give work campers "free" campsites and utility hook-ups in exchange for work should take note.
The news release, IRS Vows to Intensify Enforcement of Employment Tax Evasion was written by Elizabeth Milito, senior executive counsel, National Federation of Independent Business Small Business Legal Center. It was posted in full on the National Federation of Independent Business website at NFIB.com. The NFIB bills itself as the "Voice of Small Business." The news release date was February 19, 2009.
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