The IRS can impose interest on employment tax assessments and penalties. The interest rate is adjusted every three months and compounded daily. It is currently around 9%.
The Bottom Line: All You Could Owe
Factoring in all these assessments, penalties and interest, you can make a rough estimate of what you’ll have to pay.
If the IRS determines you unintentionally misclassified a worker for whom you filed all required 1099 forms, you’ll have to pay about 20 cents for every dollar you paid the worker, and 25 cents for every dollar if you didn’t file 1099 forms. But if the IRS finds your misclassification intentional, you’ll have to pay about 50 cents for each dollar you paid the worker.