This episode is part of the "Best of Bella" series. Bella chose this episode with a former state auditor as one of the best, because she loves being able to bring unique experts to you. If you missed this episode the first time around you'll be pretty surprised by what you hear.

Main Topics

Bella and Katrina first discuss a big controversy in the pet sitting industry, which is misclassification of employees as either independent contractors or employees. Katrina outlines some key indicators that auditors look for in making that determination:

Is there an actual contract between you and the contractor?

Are your payments to them regular in nature?

How much control do you have over them with regards to work hours, uniform, training, etc.?

Do they offer the same services to other companies through their own business?

Are you providing them all the tools, training, and supplies they need?

Basically, consider how loose is the relationship?

They also discuss why they think business owners are so apprehensive about audits, what documents a business owner should have at their disposal if they are being audited, and whether business owners should take their lawyer and accountant to the audit. Katrina also gives some insight into what triggers an audit.

Show Highlights

Who is Katrina Kadyszewski? [4:10]

How does interpretation come into play with auditors? [6:20]

Which documents should you have when being audited? [10:55]

What is the goal of an auditor? [15:20]

Should you get your lawyer or CPA involved when being audited? [17:15]

How are businesses chosen for audits? [22:40]

How far back should you be keeping records? [24:45]

What is the VCSP (Voluntary Classification Settlement Program)? [26:00]

Original Show Notes

In this episode of “Bella In Your Business”, Bella talks with Katrina Kadyszewski, a former state auditor with the State of Connecticut.

Katrina has over 16 years of experience working in a variety of financial positions. She started in the brokerage industry with a Series 7, 63 and 65 and life and health license, and then transitioned to audit work for the CT Department of Revenue Services. She then left to support small businesses in their efforts to get organized for expansion.

Katrina spent 3 of her almost 8 years with the CT Dept. of Revenue Services in the Business and Employment Tax Audit Unit, focused primarily on payroll tax issues. The last 5 years she has worked as a Corporation Tax auditor, traveling across the US auditing largely Fortune 500 companies.

Resources

There are resources out there to help small business owners. Katrina and Bella suggest a few, like the IRS’s  20-factor test to help you determine employee or independent contractor status and amnesty programs that exist to help encourage business owners to make the right switch.

Have you ever been audited? Want to hear about pet sitters who have been audited? I have interviewed a handful and reported about it all here.

Transcript:

This is episode 151 of Bella in Your Business, The Best of Bella. Today I am featuring a Best of Bella episode. I want to take you all the way back to episode 20, which if you've started listening to us recently, you might not have had the pleasure to listen to it. I actually was able to track down a former Connecticut state auditor and what we discussed on this call was really remarkable.

I love it because for a few reasons. One, I really love being the first in the industry to do anything. And to the best of my knowledge, I don't know any other industry leader interviewing auditors and talking specifically about pet sitting and dog walking. Second, I love it when I can bring these unique experts to you and have these candid conversations. I think you'll be pretty surprised what her reflection was and what she had to say about business owners actually reaching out to the government and asking for their advice. So without further ado,