The Obama administration is directing the IRS to target small businesses because they are easier and quicker to audit than large corporations. Of specific interest to the IRS will be businesses with independent contractors or "temps" who remain on the payroll for long periods of time.
Employers can save up to 30% of payroll costs by using long term "temps" to avoid payroll taxes, unemployment insurance and worker's compensation coverage. The IRS plans to examine thousands of companies this year and they are linking up with computer systems of other agencies to make it easier to share data.
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