The nanny/household employee industry has been historically notorious for misclassifying their employees (i.e. paying them off the books). The IRS is giving families a chance to come clean and fix the problem by June 30, 2013. Experts estimate that the tax shortfall for families not reporting/paying is $3-$10 billion per YEAR! The IRS have been cracking down on the household employee industry in recent years, and many believe this is a warning that they will be targeting it even more.
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