IRS, DOL Renew Employee Misclassification Memorandum of Understanding

The Internal Revenue Service and the U.S. Department of Labor announced they have renewed a memorandum of understanding (MOU) under which the two agencies will continue to work together to combat employee misclassification.

The updated MOU includes “a streamlined process for joint referrals and closer coordination to stop businesses from misclassifying works and denying them their full wages, benefits, and protections under the law,” the Labor Dept. said in a statement.

According to the MOU, the IRS will have three duties and responsibilities (1) evaluating employment tax referrals provided by DOL that meet the standardized criteria and conducting examinations to determine compliance with employment tax laws; (2) providing annual reports to DOL summarizing the results achieved by using DOL referrals; and (3) when requested by DOL, IRS will inform the Labor Dept. of any new or revised employment tax training materials.