Re: FWD: IRS 20 Questions and HR unreasonableness

Subject: Re: FWD: IRS 20 Questions and HR unreasonableness
From: Elna Tymes <etymes -at- LTS -dot- COM>
Date: Wed, 21 Apr 1999 10:07:42 -0700

Anonymous wrote about the IRS' 20 points:


> > Services rendered personally by me, rather than delegated to persons working for me. Apparently this implies that the client company is interested in me personally, not just the results of my work. However, I have no employees and have no intention of hiring any at this time. Aren't there a lot of tech writers out there going solo? How do you handle this?

You're providing services to your client company. I think what HR is trying to do is distinguish between you providing the services and you representing others who are actually doing the work. This doesn't imply a personal interest in you, just that you're providing the services. You can justify this because you're the one determining the exact needs of your client, on a day-to-day basis.

> > Continuous time frame. Right now my supervisors and I would like the relationship to be ongoing. There are several projects I'm working on, most of which will stretch out through this year and perhaps beyond. The specific scope of the projects, and how much time needs to be devoted to each one, is nebulous right now, making it quite difficult to outline specifics of the projects in the contract.

You and your supervisors agreed that you would work on some specific projects, probably to completion of some sort. Write an agreement that covers those projects, with some sort of identifiable deliverable in each case. Then add a clause that says that both you and the client have the option of extending the contract for further similar work. Then get written approvals to extend the contract - for some specific objectives - when you've completed the deliverable for each project.

> > Payment by the hour. Apparently this is another thing the IRS thinks makes someone an employee. (Although I don't know why; most employees I know are salaried, not hourly.) According to the IRS, contractors generally work on a project basis, not on an hourly one. Given the current vague nature of the projects, I don't want to give a per-project quote to the company, as it's almost a sure bet that I'll under-quote the projects and then have to spend a lot of time justifying why the projects are taking longer than I expected.

Just because you can define the deliverable doesn't mean that you can define how much time it will take. Most of us write contracts that contain some sort of estimated number of hours, at such-and-such a rate, but make it clear that this is just an estimate and circumstances may change the number of hours it will take to complete the project. Those kinds of contracts are common and completely enforceable, and the IRS doesn't object to them. (Or at least they didn't when I was audited.)

> > Requirement of full-time work. The IRS seems to think that a contractor always has to have a number of clients, and be working for all of them at any given time. I don't know any tech writers who work that way. Don't many (if not most) tech writer contractors work full time (or more than that) on a project until it's done, and then move on to another full-time project?

Depends on the nature of the contract. If it requires you to be full-time this week and then have some time off next week, that's not really "full-time work." It may very well be that there's enough work to fill a 40-hour week for most of the year. But you're basically working 'on demand' by the client. That's not the same as "full-time work."

> > Requiring that things be done in a certain sequence. The IRS says this is control, and that means you're an employee. But documentation projects *do* have a sequence. Hopefully, the tech writer has some say in what the sequence is. (And in my case, I do.) But it is still required that the projects progress in a certain order. Isn't that the case with most documentation projects?

Ah yes, but here's the difference: YOU have some control over the sequence. It's not the employer who's mandating the sequence. If you outline in your contract the sequence in which you will complete certain milestones (like first draft/first review/second draft/second review, etc.) that satisifies the IRS.

Good luck with your HR folks. Sounds like they're simply trying to cover their backsides.

Elna Tymes
Los Trancos Systems

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