Re: Question: 1099 status and agencies

[Yvonne DeGraw <yvonne -at- SILCOM -dot- COM>]

Elna Tymes wrote:
>>Btw - there's a URL somewhere for the IRS' '20 questions list' that
>>helps delineate whether you're a contractor or an employee.  I managed
>>to clean it out of my bookmark stash.

The IRS no longer uses the old "20 questions".

Instead, that have a *big* set of training materials that basically tell the
IRS examiner to list factors tending to classify someone as a contractor in
one column and factors tending to classify someone as an employee in another
column. The longer column typically wins. The factors are in the categories
of behavioral control, financial control, and the relationship of the parties.

You can download the IRS training materials for this at
http://www.irs.ustreas.gov/prod/bus_info/training.html as a 160-page (364
KB) PDF file.

Also, there's a thing called Section 530 relief that examiners have to tell
companies they examine about. It provides tax penalty relief if the company
files all 1099 paperwork, treats all workers with the same position the
same, and has some precedent (whether case-law or industry-based) for
treating a particular type of workers as contractors.

As a result, the IRS has loosened up on contractor classification. With the
previous set of 20 questions, there was no consistency in the number of
questions examiners ruled that had to be answered "correctly". Some ruled
that *all* answers had to show the worker was a contractor. Now, the
standard is pretty much more than 50% of the evidence.

Most agencies don't know this or have no interest in telling their client
companies that the IRS has loosened up.
Yvonne DeGraw, Technical Services     o Technical Writing
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