List of 2002 Articles
Found in
The Independent Contractor Report

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1. Bakery Treated Production Workers and Route Distributors as Independent Contractors. In 1991, Firm Treated Virtually Everyone as Employees. In 1992, They Switched To Independent Contractor Treatment. IRS Examined The Firm and Determined The Workers Were Still Employees.  [January 2002 Report]
2. Court Held IRS Should Have Granted Section 530 Safe-Haven Relief. Hospital Treated Certain Physicians as Independent Contractors. Hospital Relied On Advice of Both In-House and Outside Counsel. [January 2002 Report]
3. IRS Held Former School Superintendents Are Employees of School District under Usual Common Law Rules. District Provided Office Space, Equipment and Staff. Superintendents Operated through Corporation or LLC with Little or No Risk of Loss. District Had Right To Control Work Details.  [February 2002 Report]
4. Drywall Construction Workers Are Self-Employed Under Employee Retirement Income Security Act. Worker Signed an Independent Contractor Agreement. Worker Supplies Some Tools And Equipment and Firm Supplied Others. [February 2002 Report]
5. Court Denied Shuttle Service Section 530 Safe-Harbor Relief. IRS Filed Chapter 11 Bankruptcy Claim Charging that Drivers Were Employees and Not Independent Contractors. Court Agreed That Firm Did Not Meet Its Evidentiary Burden. [March 2002 Report]
6. Disabled Worker Is Not Statutory Employee Full-Time Life Insurance Salesman. Statutory Employee Treatment Is Mandated by IRC 3121(d)(3)(B) in Qualified Circumstances. Worker Previously Qualified as Statutory Employee But Became Disabled and Performed No Services. [March 2002 Report]
7. IRS and Court Agree That Partner of Incorporated Law Firm. Was Employee Not Independent Contractor. Several Excuses For Failure to File Employment Tax Returns and to Pay Employment Taxes Were Raised. The Excuses Lacked Merit. The Taxes And Penalties Were Upheld. [April 2002 Report]
8. Firm Failing to File Form 1099s One Year Still Entitled to Section 530 Safe Haven In Other Years. In Technical Advice, The IRS States That The Safe-Haven is Not Completely Forfeited Where The Firm Fails to File 1099s In One Year. Presumably, Late 1099s Are The Same As No 1099s. [April 2002 Report]
9. IRS held “of counsel” attorneys may not be independent contractors or partners. Employment tax audit of law firm was proposed. Key issue was status of so called “of counsel” attorneys. Employment tax examiner faces issues such as whether the attorney is a partner or whether the Section 530 safe-harbor applies. [May 2002 Report]
10. Key person in corporation held personally liable for trust fund employment taxes. Corporate funds were used to pay things other than withholding taxes. His refund suit was strong on allegations and weak on evidence. [May 2002 Report]
11. Safe-Harbor Applied to Firm’s Use of Physicians as Independent Contractors. Firm Contracted With Physicians To Serve as “Medical Directors.” Firm Relied on Industry Practice and on Lawyers' and Accountants' Advice. [June 2002 Report]
12. Incorporated Dentist is Employee of His Corporation For Employment Tax Purposes. Dentist Received Neither Form W-2s Nor Form 1099s. Tax Court Agreed With IRS That Payments To Dentist Were Reportable Wages or Salary. [June 2002 Report]
13. IRS Found, and Tax Court Agreed, Payment of Personal Expenses By Corporation Was Employment Taxable Wages. As In Misclassification Cases, IRS Issued Notice of Determination under IRC 7436. Corporation’s Argument That Payments Were Debt Payments Was Found to Be without Merit. [July 2002 Report]
14. Clerical Worker Is Employee and Not Independent Contractor. Federal Agency Paid Worker by the Hour and Paid neither FICA Taxes nor Income Tax Withholding. Worker Did Not Perform Similar Services For Others. [July 2002 Report]
15. IRS Held Psychologists Were Employees and Not Independent Contractors. Employer-Hospital Sued IRS To No Avail; Court Agreed With Government. Books, Videos and Other Supplies Necessary For Work Were Supplied By The Hospital. [August 2002 Report]
16. IRS Failure to Issue Statutory Notice of Determination Results in Abatement of Taxes. Firm May Be Entitled To Attorney Fees If IRS Was Not Substantially Justified In Prosecuting The Assessment. Whether This Ends The Matter For The Employer-Firm Remains To Be Seen. [August 2002 Report]
17. Public Accountant Not Independent Contractor of His Professional Corporation. PC Had Elected S Corporation Status. IRS Held, and Tax Court Agreed, That Accountant Was a Statutory Employee. Back Employment Taxes Were Due. [September 2002 Report]
18. Medical Doctor Held Employee by IRS and Tax Court. Doctor Received Form W-2 From His Employer But Filed Form 1040 With Schedule C. Litigation Missteps May Have Contributed To Loss In Tax Court. [September 2002 Report]
19. If Tipped Worker Is Independent Contractor, Then Firm Does Not Owe FICA Tax on Either Compensation or Tips. If The Worker Is In Fact and Law An Employee, Then The Firm Is Liable For FICA Taxes Not Only On Compensation But Also On Tips Received By The Worker. The U.S. Supreme Court Recently Held That the IRS Can Estimate Tip Income and Need Not Examine Each Worker’s Receipts. [October 2002 Report]
20. Non-Cash Benefits Like Company Fishing Trip May Be Payroll Taxable To Firm. Company Trip Was Attended Mostly By Employees But Several Non-Employees Were Present. IRS Will Consider Business Purpose of Trip And The Scope And Extent of Recreational Activities. [October 2002 Report]
21. IRS Failure to Send Notice of Determination Can Result in Bar to Assessment. The Notice of Determination Is a Prerequisite to Tax Court Jurisdiction. Without Jurisdiction, Any Attempted Taxpayer Petition Has Little Legal Affect. The Statute of Limitations Continues To Run Against The Government. [November 2002 Report]
22. Corporation Officer of Trucking Firm Held Personally Liable For Payroll Taxes. He Reasoned That He Had No Check Signing Authority and Was Not Responsible. Court of Appeals Affirmed District Court. Check Signing Authority Is Not a Must For Section 6672 Responsible Person Liability. [November 2002 Report]
23. IRS Alleged Payment of Commissions, Personal Expenses, and Loans Were Disguised Wages. Firm Tried To Strike The Allegation From IRS’ Tax Court Pleading. Court Held It Had Jurisdiction and Declined To Strike The Language. [December 2002 Report]
24. Beauty Salon Leased Space To Beauticians Treating Them As Lessees. IRS Determined Workers Were Not Lessees But Employees. Firm Consented To Assessment, Paid In Full, Then Received Large Interest Bill.  [December 2002 Report]

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