By "contract work we used", if you mean "independent contractors" as opposed to W-2 employees, couple of things.

I presume you issued the appropriate 1099-Misc forms to individuals for their "non-employee compensation" and can have documentation to support such classification?

Even if you have dotted all the i's in this (document) regard, this doesn't relieve you from potential " employee misclassification" problems.
Be careful of what you wish for. As Tom said above, these employee misclassification issues can get very ugly, very fast, depending on the numbers!

Let's see. There is employer's FICA, employee's FICA, FUTA, late filing, late payment and negligence penalties and interest on it all.
I repeat: Very ugly; Very fast.


Good luck.

FWIW

I got a phone message from our version of the IRS. When I returned the call I told him, politely, that I keep all my receipts, and I have bushell baskets full of them, and I would happily bring them all down and put them on his desk so we could go over every last one of them.

He asked a few questions and went away.

Good luck

Way back in my distant past (30 years ago), I was an IRS Revenue Officer.

Yes, IIRC, it was standard practice to make a cold personal call once a RO was assigned to the case.

IF the note was left by a Revenue Officer, there shouldn't be any big surprise- you should know what the issue is. Back in the day, Revenue Representatives and other lower seniority people made preliminary phone calls, and there would have been computer generated letters etc, before that.


Rick

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