Smith Dickson, An Accountancy Corporation 


May 2013



The IRS is increasing worker reclassification efforts, in particular focusing on improper treatment of workers as independent contractors vs. employees. This costs the government tax revenues, in the form of lost withholding, unemployment, workers' compensation, and Social Security and Medicare taxes. This has led to renewed compliance efforts, also resulting in the risk of greater fines and penalties for employers who fail to comply.


Most employers are now aware of the Patient Protection and Affordable Care Act (PPACA), which requires employers with at least 50 full-time employees to provide health care insurance or pay a penalty. Of course, some employers have decided that the way to avoid new taxes and requirements under PPACA is to reduce payrolls, treating workers as independent contractors instead of employees. So there are many compelling reasons for the government to be even more stringent.


Voluntary Classification Settlement Program

In 2011, the IRS began the Voluntary Classification Settlement Program (VCSP), which is a new optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers who agree to prospectively treat their workers (or a class or group of workers) as employees. To participate in this new voluntary program, the taxpayer (employer) must meet certain eligibility requirements, apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.


Common Law Rules

Several years ago, in IRS Revenue Ruling 87-41, the government identified "20 Common Law Factors" for contractor vs. employee classifications. These are ... (click here for full article)



Family Law and Business Restructuring
Sometimes the scope of our engagements change from what we were initially hired to do. In this engagement, we were hired to help in a divorce situation for a couple that had a very large estate with numerous properties and business entities. Smith Dickson was initially asked to develop a budget and cash flow for multiple entities owned by the family, as well as to restructure the organization and close down non-profitable entities. In the process, we reviewed another CPA firm's tax returns, found errors, and submitted new returns.  


Importantly, we were asked to play an integral role in the collaboration of all experts involved in the restructuring. This team of consultants included several attorneys (family law, employment, corporate and litigation), a PR specialist who dealt with negative press, a business valuation expert, and a human resources specialist who worked on job descriptions and reporting structure. It was crucial to coordinate with all these experts, in conjunction with cooperation of the couple, to effectively restructure the properties and business entities.


If you are interested in our services for business strategy matters, including forensic accounting, please contact Deborah Dickson, CPA, CFF, MFFA, President.


Radio Shows: Debbie Dickson gave a January 8th live interview on UC Irvine's radio station,, distilling the effects of the American Tax Payer Relief Act of 2012 on individuals and their businesses.


Debbie was also recently interviewed on the "Critical Mass for Business" radio show. She discussed the The Patient Protection and Affordable Care Act (commonly called "Obamacare").  Listen to her at  (April 24th show).  The radio show's audience demographic is 90%+ CEOs, business executives and owners.


Speeches: In January, Debbie Dickson spoke to "CEO-University" on the American Taxpayer Relief Act of 2012.  She also provided a presentation on tax law updates to the "Women President's Organization," which is a non-profit membership organization for women presidents of multimillion-dollar companies. 



30th anniversary Office Expansion:  In response to our clients' needs, Smith Dickson is pleased to announce that we have expanded our office space by adding the suite next door. Our newly decorated suite is enjoyable for both our staff and clients. Please visit us when you have an opportunity.


Professional Involvement: Deborah Dickson, CPA, CFF, MFFA has been re-appointed to the board of the  J. Reuben Clark Law Society as Chief Financial Advisor. The society is a unique affiliate of the Orange County Bar Association, emphasizing the relationship between law and ethics, morality, and religion. 





Smith Dickson is a full-service Southern California CPA firm that specializes in providing high-quality services designed to create long-term value for our clients. Our services include accounting, tax compliance and planning, litigation support, business consulting and estate/trust tax compliance. Please contact us with your questions.

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Smith Dickson, An Accountancy Corporation | 18100 Von Karman Avenue | Suite 420 | Irvine | CA | 92612