Certified Payroll Professional Practice Exam 2025 - Free CPP Practice Questions and Study Guide

Question: 1 / 400

What is the significance of the Past Audit Safe Haven in the determination of worker classification?

Reliance on industry standards

Dependence on prior legal rulings

IRS audit for tax verification

The Past Audit Safe Haven is significant in the determination of worker classification because it allows employers to rely on prior IRS audits for tax verification purposes. This means that if an employer has been audited by the IRS in the past and the worker classification was determined to be correct during that audit, the employer can use this as a safe harbor defense in the future if the classification is questioned again. This can provide a level of assurance to the employer regarding their worker classification practices.

Options A, B, and D are not directly related to the Past Audit Safe Haven in the determination of worker classification. Industry standards, legal rulings, and worker investment assessment may all play a role in worker classification determinations, but they are not specifically tied to the Past Audit Safe Haven as option C is.

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Worker investment assessment

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