Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!mnetor!seismo!lll-lcc!ames!ucbcad!ucbvax!decvax!decwrl!labrea!Shasta!kaufman From: kaufman@Shasta.STANFORD.EDU (Marc Kaufman) Newsgroups: misc.legal,comp.edu Subject: Re: Sorry - Independent contractors and the law Message-ID: <1085@Shasta.STANFORD.EDU> Date: Sat, 3-Jan-87 12:09:14 EST Article-I.D.: Shasta.1085 Posted: Sat Jan 3 12:09:14 1987 Date-Received: Sat, 3-Jan-87 21:51:05 EST References: <2352@mtuxo.UUCP> <488@unc.unc.UUCP> <795@maynard.BSW.COM> <492@unc.unc.UUCP> Reply-To: kaufman@Shasta.UUCP (Marc Kaufman) Organization: Stanford University Lines: 16 Xref: mnetor misc.legal:518 comp.edu:29I don't think we can get a *DEFINITIVE* ruling on this until the IRS makes up its operating rules. The purpose, evidently, is to get withholding tax from "consultants", many of whom are on very long term contracts via "body shops", who broker such workers. I think it is sufficient, in the body shop case, that the worker be an Employee of the body shop, and that the body shop (which collects the consulting fee from the ultimate employer) deduct Federal Income Tax on the way to paying the "consultant". While many consultant brokerages tend to read the ruling as being very broad, perhaps that is mostly to try to sweep in true independents and increase the complaint base. If you organize your business so that you are an Employee of a consulting firm, AND if you pay withholding taxes (as opposed to quarterly estimates) the IRS gains nothing by trying to reclassify you, so (possibly) won't.