HRMorning.com (02/08/12) Christian Schappel

The U.S. Internal Revenue Service has set out to reassure employers about its Voluntary Classification Settlement Program—the IRS initiative introduced last fall and designed to help businesses clear up their tax problems associated with employee misclassification. Under the VCSP, employers that have misclassified employees as independent contractors can reclassify those workers. However, employers have expressed concerns about whether participation in the VCSP would lead the IRS to share information about a company’s classification practices with the U.S. Department of Labor and state labor agencies. The IRS has now released a statement asserting that it will not share information about VCSP applicants with DOL or state agencies.

Businesses also worried that an employer’s participation in the VCSP would essentially amount to admitting that it misclassified workers. However, the IRS indicates that signing the VCSP closing agreement is not an admission of any liability or wrongdoing for prior years.