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Although hiring independent contractors can reduce the paperwork, tax burden and hassles associated with bringing on employees, Christopher Ezold, a business attorney and tax partner with the Ezold Law Firm P.C., a Philadelphia-based employment and business boutique, warns that employers can expect contractor classification changes by the IRS in 2012.

The IRS and the U.S. Department of Labor are partnering to uphold an information-sharing memorandum with 11 states that ensures employers are not misclassifying employees as contractors, and employers in all states can face random audits throughout the year.

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