Revenue Procedure 2014-17

Revenue Procedure 2014-17 provides guidance to taxpayers and the IRS on how to treat certain remuneration paid to independent contractors for services. It clarifies that payments made to independent contractors by third-party entities, such as client companies, are considered income to the contractor and should be reported on their tax returns. The procedure also outlines the IRS’s approach to verifying whether a worker is classified correctly as an independent contractor or an employee, emphasizing the importance of compliance to avoid penalties. In essence, it offers a framework for proper reporting and classification of these payments to ensure transparency and proper tax treatment.