Misclassifying a worker as an independent contractor doesn’t result in filing a fraudulent information return with the IRS.

December 4, 2020

A federal district court dismissed a suit by several individuals who claimed that an employer filed fraudulent returns (Forms 1099-MISC) because they were employees of the business, not independent contractors. But under the tax code, a person can bring an action for civil damages against an information return filer if the return is fraudulent as to the amounts paid, not when it misstates an individual’s employment status. In this case, the complaint didn’t allege that the amounts reported on their 1099 forms were fraudulent. (Sirin v Portx, DC NJ, 10/22/20)