List of 2003 Articles
The Independent Contractor Report

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1. Driver Delivering Bakery Products To Stores Held Not To Be Statutory Employee. He Punched a Time Clock, His Route Was Designated, And He Did Not Own His Vehicle. The IRS Determined, And The Court Agreed, That The Driver Was a Common Law Employee. [January 2003 Report]
2. Revised IRS Publication 15-A Clarifies Worker Employment Status Issues. The Usual Common Law Rules Are Divided Into Three Categories: Financial Control, Behavioral Control, and Type of Relationship of The Parties. Useful Industry Specific Examples Are Included.. [January 2003 Report]
3. Video Store Workers Used For Collection of Overdue Accounts Are Not Independent Contractors For Federal Employment Tax Purposes. Workers Performed Services on Firm’s Premises and Used Firm’s Equipment. Section 530 Safe-Harbor Did Not Apply Because Firm Failed To Prove a Reasonable Basis For Independent Contractor Treatment. [February 2003 Report]
4. Bakery Truck Driver Was Not Self Employed Thus Not Entitled To Home Office Deductions. He Was a Member of the International Brotherhood of Teamsters, Bakery Drivers Local Union No. 952. The Worker Was Required to Wear the Firm’s Uniform and Drive the Firm’s Truck. [February 2003 Report]
5. Doctor of Veterinary Medicine (DVM) Was Incorporated and Took No Form W-2 Compensation. Drywall Firm Owner Was Incorporated and, Likewise, Took No Form W-2 Compensation. In Both Cases, the Corporations Elected Subchapter S Status. In Both Cases the Tax Court, Affirmed on Appeal, Decided the Payments Were Wages and Not Non-Wage Payments. [March 2003 Report]
6. Royalties That Accountant Paid Himself Were In Reality Employment Taxable Wages. Payments Designated as Royalties Were Paid For the Use of a “Client List.” The CPA Used Multiple Related Entities In An Unsuccessful Attempt To Give the Scheme Validity. [March 2003 Report]
7. Section 530 Safe-Haven Did Not Apply To President / Owner of “S” Corporation. Firm Engaged In Steel and Steel Coil Pickup and Delivery. He Did Everything For The Firm. Held: President Is Employee For Federal Employment Tax Purposes.[April 2003 Report]
8. Home Health Services Firm Owed $600,000 In Back Employment Tax, Interest and Penalties. Firm Went Bankrupt and Obtained Court Order Enjoining the IRS From Proceeding Against the Firm’s President For Trust Fund Tax. Court of Appeal Overturned the Injunction. Bankruptcy Court Had No Jurisdiction Over the President as a Non-Debtor and the Anti-Injunction Act May Have Barred The Injunction Anyway.[April 2003 Report]
9. Terminated Bookkeeper Sued Small Medical Clinic For Violation of Americans With Disabilities Act. ADA Applies If Firm Has 15 Employees. To Escape ADA Firm Argued Physicians Were Not Employees. United States Supreme Court Held That Traditional Common-Law Rules Decide Who Is Employee Under ADA. [May 2003 Report]
10. Subchapter S Corporation Home Improvement Contractor Reported Payments To Its Owner on Neither Form 1099 Nor Form W-2. On Audit IRS Determined Firm Should Have Treated Him as Employee and Issued Form W-2s. Section 530 Safe-Harbor, Asserted Late In The Case, Found Not To Apply. [May 2003 Report]

11. Accounting Temp Turned CFO Liable For Unpaid Employment Taxes. He and IRS Settled Liability of Over $123,000 for $12,500. He Then Went After Others For Contribution. Without Proof The Others Were Also Liable Under IRC 6672, He Was Not Entitled To Contribution. [June 2003 Report]

12. Neurosurgeon’s Criminal Tax Conviction Upheld. Workers Were Paid In Cash and He Failed To Obtain a Federal Employer Identification Number. Conviction For Bank Fraud, Mail Fraud, and Tax Evasion Affirmed. [June 2003 Report]

13. Truck Drivers Are Independent Contractors For Federal Employment Tax Purposes. Drivers Did Not Own The Trucks But They Did Keep Possession At All Times. Drivers Were Paid Neither By The Hour Nor By The Mile. Truck Owner And Driver Split The Fees. [July 2003 Report]

14. Teacher / Instructor Is Not An Independent Contractor For Federal Employment Tax Purposes. Worker Received Training, Had No Expenses, And Was Entitled To Sick Leave. Federal Agency / Employer Later Treated The Same Worker As An Employee.[July 2003 Report]

15. Emergency Room Doctors Successfully Treated as Independent Contractors for Federal Employment Tax Purposes. Tax Court Held Late Filing of Form 1099s Did Not Disqualify Firm From Relief Under Section 530 Safe-Harbor. IRS Not Likely to Acquiesce in This Decision. [August 2003 Report]

16. Public Park Attendant is Not an Independent Contractor for Federal Employment Tax Purposes. Worker Was Required to Attend Orientation / Training Sessions. Worker Was Also Required to Furnish RV or Motor Home to Serve as Living Quarters. [August 2003 Report]

17. President of Closely Held Corporation Is Employee For Federal Employment Tax Purposes. Officer – Shareholder Was an Attorney at Law. All the Firm’s Income Was from Legal Services. Court and IRS Agreed That President Was a Statutory Employee. [September 2003 Report]

18. Payments to Corporation Owner – Officer Were Wages and Not Royalties. An Employment Agreement Provided That She Was To Receive Only $400 Per Month In Wages. That Agreement and Others Were Disregarded by the Court as Attempts to Hide the True Nature of the Payments as Wages. [September 2003 Report]

19. IRS held officer, part owner of corporation personally liable for back Federal employment taxes. Corporation was formed to build homes in a gated community on a golf course. He decided to pay others before the IRS. Big mistake. [October 2003 Report]

20. IRS rules that section 530 statutory independent contractor status will be recognized though workers are employees under usual common law rules. Firm’s contract was modified to provide for supervision and control over the means and details of the work. That is normally fatal to independent contractor status. Here it was not due to the section 530 safe harbor. [October 2003 Report]

21. Corporation officer was not guilty of willful conduct under section 6672. Bankruptcy court denied IRS claim against him personally for unpaid payroll taxes. Denial was affirmed by U.S. District Court. [November 2003 Report]

22. Law office secretaries are employees for federal employment tax purposes. Major defense for the employer-firm, the section 530 safe harbor, did not apply. Form 1099s had not been issued. Normally an IRS examination looks at two or three years. Here, the IRS examined five years.[November 2003 Report]

23. IRS held accounting technician is employee for federal employment tax purposes. Federal agency treated worker as an independent contractor. Worker was trained on-the-job by the agency and worked on the agency’s premises. [December 2003 Report]

24. IRS held it may not levy property of limited liability company for unpaid employment taxes. A taxpayer's property rights are first determined under state law. If there is no taxpayer property interest under state law, the IRS has no right to levy the property. [December 2003 Report]

[ Page updated: December 13, 2009 ]