Episode 38 - IRS VCSP

Written By Felicia Tanzi

Voluntary Classification Settlement Program

Misclassifying employees as 1099 contractors is one of the most common and costly mistakes small businesses make. From unexpected IRS audits to back payroll taxes, penalties, and Department of Labor fines, worker misclassification can snowball into a serious financial risk.

In this episode of Full Throttle Finance™, Felicia and Alli break down the IRS Voluntary Classification Settlement Program (VCSP) a little-known opportunity for businesses to correct past mistakes.

We cover:

  • What the IRS looks at when deciding 1099 vs W-2 classification

  • How misclassification impacts payroll taxes, Social Security, Medicare, and unemployment insurance

  • Real-world examples from motorsports, construction, hospitality, and e-commerce

  • How the VCSP reduces liability to 10% of last year’s contractor pay

  • Eligibility requirements and the Form 8952 application process

  • Why coming forward now protects you from future IRS audits

Whether you’re running a race team, small construction crew, hospitality business, or online retail shop, understanding the VCSP could save you thousands while keeping your business compliant.

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Felicia Tanzi
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Episode 37: OB3 — Tax Changes for Individuals & Employers