EO – Special Procedures for Unagreed Worker Classification

If a worker classification case is unagreed, and neither Form 1099-MISC nor Form W–2 were filed, follow these special procedures:

Prepare two Forms 8278 to reflect penalty assessments. Don't provide to the taxpayer.

Prepare two Forms 3645 to reflect penalty assessments. Don't provide to the taxpayer.

The first set (pair) of Forms 8278 and 3645 will reflect Form W-2 penalty assessments.

The second set of Forms 8278 and 3645 will reflect Form 1099-MISC penalty assessments.

Attach a post-It note to the first set (Form W-2 penalty) indicating "Primary Examiner Position."

Attach a post-It note to the second set (Form 1099-MISC) indicating "Alternate Examiner Position."

Prepare two explanations on Form 5773 at Section I, Penalties, Subsection 6, Other.

Title the first explanation, "Primary Examiner Position."

Title the second explanation, Alternate Examiner Position.

Enter in the "Other" section of 3198-A Special Handling checksheet in RCCMS, "Suspend assessment of information return penalties until the taxpayer's request for appeal period has expired."

Associate the penalty case file with the employment tax case file under examination.