Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) May :00 to 3:30 ET May 23 – 10:00 to 11:30 ET

2 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Welcome to Workforce 3 One! Welcome to Workforce 3 One!

3 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Submitting Questions: Open Chat Drop-Down Menu  To submit a question, type the question in the text field and press your Enter/Return key. ‒ Please enter the name to whom the question is directed.  To send questions only to the presenters, select Presenters from the drop-down menu before pressing your Enter/Return key.  Change Text Size and Chat Color… Text Field

4 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP)  To submit a question, type the question in the text field and press your Enter/Return key. ‒ Please enter the name to whom the question is directed.  Your name and your question will appear on your screen, indicating successful submission.  Questions are directly transmitted to presenters—no other participants will see your questions. Submitting Questions: Closed Chat Text Field Gary, where can I find today’s PPT?

5 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP)Practice In the Chat Room, please type the name of your organization, your location, and how many people are attending with you today.

6 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

7 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Featured Speakers Presenters  Anita Bartels, IRS, Employment Tax  John Tuzynski, IRS, Employment Tax  Stan Davis, Director, Division of Employer Accounts New Jersey Moderator  Tom Crowley, UI Tax Chief, USDOL/ETA

8 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Moderator Tom Crowley UI Tax Chief USDOL/ETA

9 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) What’s in It for You?  What is QETP?  How can QETP help state UI Tax organizations?  Can QETP help my audit performance?  What does the IRS do with state QETP data?  What tools can the IRS provide states enrolled in QETP?

10 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP)  ETA - QETP Introduction & Review –What, Who, How & Why  IRS – QETP Progress Report –Review of QETP enrollment process –State results reported to IRS –IRS benefits derived from QETP –Beyond 1099s – Additional data tools  New Jersey Report-Out Agenda/Objectives

11 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) QETP - Employment & Training Administration QETP History  A list of the enrolled states  Describe worker misclassification initiative and tie-in to QETP  Address the UC TOP program, and how states are overcoming Safeguard Procedure hurdles, which could also help QETP initiative.

12 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Which states have enrolled so far?  37 States have enrolled in the QETP initiative since 2006  AR, AZ, CA, CO, CT, FL, HI, IA, ID, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TX, UT, VA, VT, WA, and WI QETP - Employment & Training Administration

13 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Which states are reporting results to the IRS?  Only 7 States reported results for the period ending December 31, 2011  MO, NE, NJ, NY, PA, SC, and UT.  Total number of workers reclassified – 9,196  Total Number of employers examined – 655  Total Wages Reclassified - $110,708,516 QETP - Employment & Training Administration

14 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) QETP - Employment & Training Administration State-Reported QETP Results

15 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) How does QETP relate to the UI worker misclassification detection initiatives?  ETA’s Office of Unemployment Insurance (OUI) has promoted increased awareness of worker misclassification abuses  Attention focused on smart resource commitment  Effective Audit Measure – ETA reduced the number of required audits; but raised expectations for misclassification detection and enforcement  QETP and other IRS initiatives provide tools that enhance audit selection: 1099’s, SS-8’s, Corporate Affiliations, etc.  GLDEP – data exchange program QETP - Employment & Training Administration

16 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) How does UC TOP relate QETP?  UC TOP has no direct relationship to QETP, but the process to enroll in UC TOP also gets you (the state) in the door for QETP  States must enter into a basic agreement with the IRS and have an approved Safeguard Procedures Report (SPR)  Once these are in place, states are eligible for UC TOP, GLDEP, QETP. UC TOP - ETA

17 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) The UI Community of Practice (UI CoP)  The UI CoP is an on-line collaborative workplace restricted to federal & state UI staff.  Coming in June 2012 will be new dedicated areas for states to share and collaborate on specific topics, like QETP.  States are encouraged to seek out successful states and develop relationships to enhance their abilities to use QETP effectively.  There will be an announcement on the new UI CoP in the week or so. The URL for the existing CoP is: UI CoP - ETA

18 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) IRS Presenters Anita Bartels John Tuzynski Employment Tax IRS

19 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) IRS - What’s in It for You?  It’s all about leverage  And saving money  IRS activity  What can IRS do for you?  Really

20 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) IRS - Benefits of Participation  Improve compliance at a lower cost  Reduce fraudulent filings and schemes  Enhance and leverage data exchanges  Strengthen agency partnerships  Share information; training, outreach, trends –IRS NRP will help

21 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) IRS - The Future Goals of QETP  Optimize usage of QETP data  Share best practices  Improve communication  Coordinate Compliance focus  Leverage outreach and education opportunities

22 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) New Jersey Presenter Stan Davis Director Div. of Employer Accounts NJDOLWD

23 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) I. Make the Commitment State of New Jersey Commitment to QETP  2005 through 2007 New Jersey collaborated with USDOL, IRS, NASWA, FTA and other states to developed the QETP initiative.  New Jersey signs QETP MOU in November 2007  Former Governor Corzine directs NJDOLWD and Dept. of Treasury to work together to address misclassified workers.  Former Governor Corzine signs Construction Industry Independent Contactor Act is signed into law in July of 2007.

24 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) New Jersey Department of Labor and Workforce Development Exchange Agreements  The Division of Employer Accounts exchanges audit findings with Divisions of Wage and Hour and Worker’s Compensation and the New Jersey Division of Taxation.  The Division of Employer Accounts shares its audit reports and case information, audit plans and best practices with IRS. II. Data Sharing

25 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) New Jersey Department of Labor and Workforce Development Results  IRS provides the Division of Employer Accounts with the 2504 (940 & 941), 1099 and SS8 for our audit investigations III. Realize the Benefits

26 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) New Jersey Department of Labor and Workforce Development Results  Participation on Cash Sub-Team Committee III. Realize the Benefits

27 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) IV. Where Do We Go Tomorrow New Jersey Department of Labor and Workforce Development Strategy  Continue our commitment to QETP  Continue our outreach programs  Continue Data Sharing  Creation of the Division of Fraud and Risk Management

28 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Please enter your questions into the Chat Room! Question and Answer Period

29 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Resources Useful QETP Links:  Effective Audit Measure results for 2011:  UI Community of Practice (UI CoP):  IRS Fact Sheet on QETP:

30 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Speakers’ Contact Information John Tuzynski  Stan Davis   Phone: –(609) Anita Bartels  ‒ Tom Crowley  ‒  Phone: ‒ (202)

31 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Share Your Ideas with Your Peers! Share your demand-driven strategic plans, models, innovations, resources, and ideas! You have the option to submit content for review by uploading the resource or providing a link to the resource.

32 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

33 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP) Stay Informed, Get Connected!

34 Questionable Employment Tax Practices (QETP) Questionable Employment Tax Practices (QETP)