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List of 2006 Articles
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The Independent Contractor Report

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2006

  1. Some employers wrongfully pyramid their federal employment tax liabilities. A government report says the IRS needs to improve how it deals with these firms. As of March 31, 2005, employers owed the IRS roughly $10 billion.
    January 2006 Report ---> click here to view --->  Click here to get this issue in PDF format.

  2. Commissions paid by car dealership were wage income. $13,500 in commissions were paid to finance manager by car dealership. Held: Payment were taxable employment compensation and not non-taxable cash advance.
    January 2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  3. IRS determined bar and restaurant bouncers, door persons, coat check persons and entertainers were employees and not independent contractors. Court found that loss of IRS file did not warrant dismissal of case. Court also found actual dispute over classification of workers. Case will go to trial.
    February     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  4. Insurance salesperson failed to qualify as statutory employee. He was found to be common law employee. Company had right to control manner in which he worked.
    Penalties avoided as he reasonably relied on his tax return preparer.
    February     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  5. Lawyer failed to stop former employer from withholding taxes. Claim barred by Anti-Injunction Act. Section 3403 immunizes employers from liability for withholding taxes from wages.
    March     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  6. Insurance commissions were self-employment (Schedule SE) taxable. Commissions were from policy renewal payments. Commissions were tied to past work as independent agent.
    March     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  7. Dance instructors at dance studio are independent contractors for federal employment tax purposes. On a lead from an instructor / informant, IRS audited the dance studio and held instructors were employees. Court held firm may recover attorney fees; the government position was not justified..
    April     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  8. IRS updates publication on worker employment status. Publication 1779 gives brief overview of who is, and who is not, an employee. Written for the payee / worker -- not the payer / firm..
    April     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  9. Software consultant is employee and not independent contractor. Tax Court held he was common-law employee under section 3121(d)(2). Court also held he was not a statutory employee under 3121(d)(3)(D).
    May     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  10. IRC 6672 officer personally liability can have unlimited limitations period. Same unlimited period that applies to the employer's return. Form 940s and 941s should be filed to avoid unlimited period.
    May     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  11. Attorney is employee and not independent contractor Ninth Circuit affirms. Tax Court held attorney / corporate officer was employee. Case remanded to determine if IRC 3402(d) exception applies.
    June     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  12. Pipe fitter is employee and not independent contractor. Schedule C deductions not allowed. Accuracy-related penalty applied.
    June     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  13. Rash of natural disasters may be causing some businesses to misclassify workers.
    IRS reminds businesses to classify workers correctly. Service cautions firms to “make sure they treat their workers properly” for Federal employment tax purposes.
    July     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  14. District court decided that IRS assessment of trust fund recovery penalty was timely. Service failed to produce the individual's written protest. Fact of protest was proved and protest extended the assessment period.
    July     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  15. Suit for return of firm’s documents dismissed for lack of jurisdiction. IRS agents seized documents in criminal investigation. District Court held it does not have jurisdiction over pre-indictment action for the return of documents.
    August     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  16. Company ordered to timely pay employment taxes. Court granted the government an order to force a company to pay employment taxes. Court denied the IRS request to lift the levy suspension.
    August     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  17. California Court of Appeals affirms Department of Industrial Relations finding of employee status for couriers and messengers. Firm provides courier and messenger services to title companies and law firms. Department issued stop work order and $15,000 penalty for failure to have workers’ compensation insurance.
    September     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  18. Packager of computer parts is independent contractor. She was found liable for self-employment tax. She failed to report the income claiming identity theft.
    September     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  19. IRS small business / self employed unit offers tips on how to correct reporting of misclassified workers. Employers on occasion make worker misclassification errors. Though not actually withheld, employers are still liable for employee’s federal income tax that should have been withheld.
    October     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  20. Tax attorney, former IRS auditor liable for self-employment tax. He was not statutory employee full time life insurance salesman. He failed to substantiate that his claimed expenses were deductible.
    October     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  21. Dentist with unpaid payroll taxes suffers IRS levy. Court held government properly proceeded with levies. Dentist allegedly failed to provide the requested information and bring his tax deposits current prohibiting collection alternatives.
    November     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  22. Lawyer enjoined from interfering with IRS enforcement. Lawyer and others ordered to stop preparing, or helping to prepare, tax forms, complaints, and correspondence to IRS. IRS argued they had been unlawfully interfering with administration and enforcement of federal tax laws.
    November     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  23. IRS held construction firm operating as trust owed $359,000 in back employment taxes. Court ruled IRS not barred by statute of limitations. Trust failed to file any returns.
    December     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

  24. IRS updates publication on backup withholding. Firms liable for 28 percent of amount paid to worker if proper procedure not followed. Publication 1281 updated as of July of 2006.
    December     2006 Report ---> click here to view ---> Click here to get this issue in PDF format.

[ Page updated: Wednesday, April 11, 2007 ]