NASHUA, N.H.  The Internal Revenue Service and 37 states are cracking down on companies that illegally try to trim payroll costs by changing employees' status to independent contractors, The Associated Press has learned. The practice costs governments billions in lost revenue and can leave workers high and dry when they are hurt at work or are left jobless. Many who've studied the problem believe it's worsened during the economic downturn — fueling states to be even more aggressive with their recovery efforts. By designating workers as independent contractors, businesses can save as much as 30% of payroll. They can also avoid unemployment insurance and workers' compensation payments, as well as the employer's share of payroll withholding. EMPLOYEE VS. INDEPENDENT CONTRACTOR: 10 tips for business owners SMALL BUSINESS ADVICE: Should you hire an employee or independent contractor? Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more