In some taxpayer friendly moves, the Internal Revenue Services is giving companies a low-cost opportunity to clean up any lingering mistreatment of employees as independent contractors and is relaxing its view on the tax benefits that should be attached to company-provided cell phones.

The IRS launched a new program to allow companies with worker classification issues to voluntarily fix the problem and get certainty under the tax law for a minimal payment to cover unpaid payroll tax obligations. It is part of the “fresh start” initiative the IRS is undertaking to help taxpayers address noncompliance issues and get back on track, said IRS Commissioner Doug Shulman in a prepared statement. “This settlement program provides certainty and relief to employers in an important area,” he said.

The Voluntary Classification Settlement Program is open to any company that erroneously treated workers as nonemployees or independent contractors and wants to correct it. To be eligible, taxpayers must have consistently treated workers as nonemployees in the past, must have filed all required Forms 1099 reporting payments to those workers for the past three years, and may not be under audit currently with the IRS. The IRS also won't accept any company that is already under audit by the Department of Labor or a state agency investigating worker classification issues.

Taxpayers accepted into the program will pay an amount effectively equaling just more than 1 percent of the wages paid to reclassified workers for the past year, with no interest or penalties. The IRS also promises it won't subject accepted taxpayers to an audit on payroll taxes related to those particular employees for prior years, but it will impose a six-year statute of limitations rather than the usual three for the first three years of the program.

As for mobile phones, perhaps just as whipped as taxpayers by the minutia of it all, the IRS has issued Notice 2011-72 to provide long-awaited relief on the tax treatment of cell phones that companies provide to their employees as tools to do their jobs. The IRS said when a company provides a cell phone to an employee for business reasons, it will not be included in the employee's income as compensation, sparing employees and employers alike from tedious recordkeeping to justify when cell phone expenses are business related.

The notice says the IRS will treat an employee's business use of an employer-provide mobile phone as a nontaxable working condition fringe benefit. As for any personal use of employer-provided cell phones, the IRS said it will regard such benefit as a de minimis fringe benefit, meaning it does not need to be included in income, and therefore is not taxable.