If my understanding is correct, merely the fact the IRS has officially made this classification entitles those workers to a refund, even if the IRS never manages to collect the money from FTX.
A nice big fat bonus paycheck for the workers there!
Possibly, if they ever actually collect it. (not sure of the legal requirement here)
The best thing a contractor in this situation can do is file an amended return now, using Form 8919 to re-calculate the employee share of FICA tax they owe. This will also involve filing Form SS-8 (separately) to dispute their status as a contractor. It may take several years to get processed, but at least it creates a formal claim that the IRS will have to eventually honor or deny.
Also note that only the 7.65% employer portion of FICA, less the income tax deduction that Schedule C filers get for that, is in question. Also, as employees there may be other business deductions they took on Schedule C they would no longer be entitled to.
The employer (FTX) is also liable for taxes that sole proprietors don't pay, such as FUTA (federal unemployment), and a variety of state payroll taxes most likely.
Here’s a quote from the IRS [0]: “ An employer generally must withhold social security and Medicare taxes from employees' wages and pay the employer share of these taxes.”
[0] https://www.irs.gov/businesses/small-businesses-self-employe...
The argument is that, as the now employees understood themselves to be contractors, they paid the (higher) contractor tax rate (employee + employer). If the IRS is retconning them as employees and FTX owed the employer's share of the employees' taxes, the employees are entitled to a refund of the amount they overpaid.