How do I request a reclassification from 1099 to w2 for 2008-2009 from the irs?

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I am being audited by new mexico for unpaid gross receipts taxes 2008-2009. I was employed by a lab as a 1099 independent contractor. I paid my quarterly taxes but did not know about the NM gross receipts tax. After some research, I believe I was intentionally misclassified as a 1099 by the lab to avoid paying taxes. If I start this process, and start paying NM for these back taxes, will they have to pay me back if I prove that I should have been W2? Can I make payments on the owed taxes? Can the interest and penalties be reduced in any way?

Attorney Answer

1
Dana Atchley ·
Unfortunately it isn't as simple as just requesting to be reclassified. It will be even harder because you've already filed as an independent contractor for prior years (I'm assuming you've filed all your returns). You will almost certainly need to retain a good CPA or tax attorney to assist you in amending your old returns (you have to be consistent across all affected years; you cannot pick and choose) and to assist you in analyzing the various factors the IRS (and the states) use to differentiate employees from independent contractors.
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