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List of 2008 Articles
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The Independent Contractor Report

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2008

  1. Truck driver for courier firm determined to be independent contractor. He delivered for firm that delivered by bicycle, car, or truck. He failed to file Federal income tax returns.
    January 2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  2. IRS releases fact sheet on worker classification. Part of educational series on tax gap. Sheet helps firm owners correctly classify workers.
    January 2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  3. Individual debtor found personally liable for state and federal trust fund tax. U.S. bankruptcy court held that the debtor is liable because he was a responsible person who willfully failed to pay over the withheld taxes (trust fund taxes) owed by his company. Trust fund tax not dischargeable in bankruptcy.
    February     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  4. Taxi drivers are not independent contractors, NLRB ruled. U.S. Court of Appeals affirmed NLRB. It was significant to the Court that Cab Company forbids drivers from operating independent businesses.
    February     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  5. IRS charged a criminal attempt to evade tax against a small corporation owner. He took over $1 million out of his corporation and paid no income tax. Supreme Court held officer / shareholder may assert return-of-capital defense without proof of intent.
    March     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  6. IRS determined CPA liable for firm’s employment tax. Court held CPA failed to disprove her status as responsible person. Her claim for wrongful assessment of trust fund recovery penalties and improper retention of her refund were dismissed.
    March     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  7. Muffler shop workers were employees not independent contractors. Tax Court penalized firm for repeatedly advancing frivolous arguments. IRS determination that several individuals were employees was upheld.
    April     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  8. Data entry worker held statutory employee homeworker. Worker was therefore not liable for Schedule SE self-employment tax. Worker performed significant work away from home at Los Angeles Unified School District.
    April     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  9. IRS released new 2008 publication on duty of family or elders to comply with payroll tax laws. Publication 926 is more than 30 pages; details numerous legal responsibilities to withhold and pay tax for in-home workers. Level of compliance by family or elderly payers is suspect leaving them exposed to tax audit.
    May     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  10. IRS, tax court agree retired insurance agent's income subject to self-employment tax. Insurance agency was LLC deemed sole proprietorship. Income agent received as sole proprietor after he retired was gross income subject to self-employment tax.
    May     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  11. IRS overruled by bankruptcy court. Unpaid corporate officer not liable for corporation’s unpaid payroll taxes. Court held unpaid president of auto body shop not personally liable. President was not involved in day to day operations of body shop.
    June     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  12. Court says IRS may proceed with collection action for unpaid employment taxes. Court sustained IRS decision to proceed with collection action against firm. IRS declined proposed installment agreement. Firm had failed to remain current and failed to provide complete financial information.
    June     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  13. IRS chief counsel advice says qualifying firm in voluntary non-audit context may use low section 3509 tax rates for past years only and not current year. Trust fund tax is the employee share of FICA and income tax withholding. Low section 3509 tax rates for trust fund taxes may be used by qualifying employer when it reclassifies workers after an adverse IRS private letter ruling.
    July     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  14. Firms using independent contractors (ICs) should use ICs fitting a recognized business form. IRS has released a tax gap fact sheet concerning business structure choices. Firms using ICs should consider using ICs that are corporations or limited liability companies.
    July     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  15. Registered nurse with expired California license filed North Carolina unemployment claim. Nurse worked seven nights per week, gave intravenous injections to the patient / care recipient. NC Commission concluded the claimant / nurse was independent contractor and not an employee.
    August     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  16. IRS agents can prepare substitute Form 941 returns in worker status cases. IRC 7436 procedural requirements must be met before assessment. The firm under audit failed to file Form 941 employment tax returns alleging some workers were independent contractors.
    August     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  17. Newspaper delivery persons are employees for workers’ compensation purposes. State Fund billed newspaper publisher for back insurance premiums for misclassified delivery workers. Court of Appeal affirmed that workers were employees, back premiums upheld.
    September     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  18. Salespeople may be statutory independent contractors of firm for federal employment tax purposes. Judge denied IRS motion for summary judgment on employment tax issue. Judge held firm may be entitled to relief from $90,000 employment tax assessment under section 530 safe haven.
    September     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  19. Unlicensed painter held independent contractor and not employee for California law purposes. Painter had expired state contractor license. Evidence that the firm did not know of the expiration was believed. Trial court held, and appeal court affirmed, that the painter was independent contractor, and legally barred (estopped) from claiming he was an employee.
    October     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  20. IRS revised Publication 1779 on independent contractor vs. employee test. Worker status has no bright line test. In general, the IRS and the courts look at various “factors.”
    October     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  21. Construction inspector determined to be an independent contractor. He sued his employer for wrongful termination and other employment based causes. Appeal Court agreed with trial court that all the undisputed facts “add up to an independent contractor relationship.”
    November     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  22. IRS and Tax Court both reversed by Court of Appeals; trucking firm not liable for employment taxes. Firm qualified for tax relief under section 530 safe-harbor. Firm always treated truck drivers as independent contractors and not employees.
    November     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  23. IRS may have failed to give due advance written notice of trust fund recover penalty assessment holding corporate officer personally liable for back employment taxes. Court denied government’s motion for summary judgment to reduce trust fund recovery penalty assessments to judgment. There was a genuine issue whether the individual waived his right to notice of the assessments under section 6672.
    December     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

  24. IRS can’t twice collect trust fund recover penalty or interest from responsible persons like corporation officers. IRS concluded courts would not let government collect more than once. Credit must be given to responsible persons for payments made by the employer that are properly designated.
    December     2008 Report ---> click here to view --->  Click here to get this issue in PDF format.

[ Page updated: Monday, December 22, 2008 ]