James S. has a consulting relationship with Horizon Systems and is classified by Horizon as an independent contractor. State tax authorities have notified Horizon that it will audit Horizon’s independent contractor relationships and impose penalties and tax withholding liabilities if workers have been misclassified as independent contractors. If workers such as James are determined to be misclassified, which penalty would the IRS likely impose on Horizon? 

a. Payment of income taxes not withheld from worker salaries. 

b. Payment of Social Security and Medicare taxes not withheld from worker salaries. 

c. Payment of ‘back’ Unemployment Taxes. 

d. All of the above.