The on-demand economy is growing, as people seek faster ways to get the services they want at affordable prices. But workers in the booming industry sometimes struggle with making sense of their tax status, and perhaps more important, getting taxes and forms in on time and making payments in full.Two of the more well-known on-demand companies are Uber and Lyft. Some of them might not even realize that they are not employees, but are rather treated as independent entities required to make quarterly tax payments to the Internal Revenue Service.
The IRS's internal watchdog, the National Taxpayer Advocate, argues that these workers need guidance to get into compliance. A recent survey showed that slightly more than two-thirds of them get no tax assistance or information from the companies themselves.
And when they call the IRS, they're told that the agency isn't fielding tax questions over the phone or in person. Instead, they're simply urged to check out the agency's website.
National Taxpayer Advocate Nina Olson said the situation is “beyond unacceptable. It is absurd.”
Of course, the no-help situation extends to others who are not in the on-demand economy and have questions about employment tax issues. It is harder than ever to get help from the IRS, even when assistance is needed to resolve serious tax-related issues.
In many cases, the stakes are high; so high that a taxpayer opts for help from an experienced tax attorney rather than relying on assistance from the IRS. In many situations, people are coming to the realization that the IRS is understaffed, though it continues to conduct audits and investigations that can have serious repercussions for those under the spotlight.