Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!mnetor!seismo!mcnc!unc!rentsch From: rentsch@unc.UUCP (Tim Rentsch) Newsgroups: misc.legal,comp.edu Subject: Re: Sorry - Independent contractors and the law Message-ID: <492@unc.unc.UUCP> Date: Fri, 2-Jan-87 18:04:03 EST Article-I.D.: unc.492 Posted: Fri Jan 2 18:04:03 1987 Date-Received: Fri, 2-Jan-87 21:35:20 EST References: <2352@mtuxo.UUCP> <488@unc.unc.UUCP> <795@maynard.BSW.COM> Reply-To: rentsch@unc.UUCP (Tim Rentsch) Organization: CS Dept, U. of N. Carolina, Chapel Hill Lines: 54 Xref: mnetor misc.legal:513 comp.edu:28 In some previous article Larry Campbell writes: > [Excerpt from my previous article] > >A couple of quick thoughts on the recent tax legislation requiring > >engineering and programming consultants to be considered "employees" > >for tax purposes: > > THIS IS NOT TRUE. It is true ONLY for consultants who get work through > temporary help agencies (body shops) and the like, and requires that they > be considered employees of the temp agency. Totally free-lance consultants > who do not use agencies are NOT AFFECTED. Well, that is what I thought originally (source was a netnews article), but a subsequent article gave quite a different impression. The posting giving a summary quotation of the new legislation seemed pretty clear (here, let me see if I can dig it up ... scratch, scratch): Engineers, designers, drafters, COMPUTER PROGRAMMERS, SYSTEMS ANALYSTS or similary skilled workers engaged in a similiar line of work must be issued w-2 forms as COMMON LAW EMPLOYEES for income and employment tax purposes, according to the new FEDERAL Tax reform act of 1986 section 1706. The law is effective January 1 1987. It applies whether or not services of such individuals are provided only to one client or more than one client during the year; and whether or not such individuals are designated or treated as independent contractors, sole proprietors, partners, or employees of a personal service corporation controlled by such individuals or their families. Section 1706: TREATMENT OF CERTAIN TECHNICAL PERSONNEL. (a) IN GENERAL - Section 530 of the revenue act of 1978 is amended by adding at the end thereof the following new subsection: "(d) EXCEPTION - this section shall not apply in the case of an individual who, pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work." Well, the other posting is clear enough in its statement, even though the excerpt quotation is not complete. Who is right? Can we get a more authoritative statement, or a more complete excerpt of the law? (I hope we can get both.) Note that the person who said that all people are affected quoted some facts to back up his argument, although I admit I would like to see more. An argument of the form "It is so" "It is not" is not informative -- can we some some reasons and sources to back them up? cheers, Tim