Q: What are my options in a situation where the church receives a SS-8 from IRS for Minister who receives 1099-NEC?
I am a bookkeeper for a religious organization in New York City and received a SS-8 from the IRS referring to a minister who I issued a 1099-NEC for the past two years for her regular professional services to the church. There are several other ministers who perform similar service who also receive 1099-NEC. What is the simplest way to handle this situation. Should I simply reclassify this person. The alternative is completing the form with information about all of the other ministers' compensation?
A:
Receiving a Form SS-8 from the IRS in this context indicates they are reviewing the classification of the minister as an independent contractor (reflected by the 1099-NEC) versus an employee. The IRS will determine whether the minister should be classified as an employee based on factors like the degree of control and independence in their work relationship with the church.
In responding to the SS-8, it's crucial to accurately describe the working relationship with the minister in question. Include details about how the work is performed, the level of control the church has over the minister's work, and other relevant information.
Reclassifying the minister without a proper review might not be the simplest or most appropriate solution. It could have implications for both the church and the minister in terms of taxes, benefits, and legal responsibilities.
If you're unsure about how to proceed, it might be wise to consult with a tax professional or an attorney who specializes in tax law. They can guide you through the process, help you understand the implications of different classifications, and assist in responding to the SS-8.
Remember, accurate classification of workers is important for compliance with tax laws. It's essential to handle these matters carefully to ensure both legal compliance and fairness to all parties involved.
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