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There's a confused discussion about whether a 1099 contractor is to be considered an employee because "he should have been an employee according to IRS code" in this thread: http://boards.fool.com/Message.asp?mid=22759783

Would appreciate comments.
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No. of Recommendations: 1
There's a confused discussion about whether a 1099 contractor is to be considered an employee because "he should have been an employee according to IRS code" in this thread: http://boards.fool.com/Message.asp?mid=22759783

Would appreciate comments.


This is a legal question and not a tax question. It would be better asked on a legal board. My non-lawyer opinion is that a 1099 contractor is not an employee until the IRS determines that he is(was) an employee. In other words, even if the determination seems like a "slam-dunk", if the "employee" hasn't asked the IRS to classify the position and/or the IRS hasn't issued a decision, then he isn't an employee.

Ira


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My non-lawyer opinion is that a 1099 contractor is not an employee until the IRS determines that he is(was) an employee. In other words, even if the determination seems like a "slam-dunk", if the "employee" hasn't asked the IRS to classify the position and/or the IRS hasn't issued a decision, then he isn't an employee.

The determination is retroactive, but there's also an employer "safe harbor" that may apply and make the result only forward-going. It's not automatic, though. Sorry I can't be more specific. The provision is one of those things that never made its way into the IRC, but is sitting around in an enacted law.

Phil
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No. of Recommendations: 1
My non-lawyer opinion is that a 1099 contractor is not an employee until the IRS determines that he is(was) an employee. In other words, even if the determination seems like a "slam-dunk", if the "employee" hasn't asked the IRS to classify the position and/or the IRS hasn't issued a decision, then he isn't an employee.

The determination is retroactive, but there's also an employer "safe harbor" that may apply and make the result only forward-going. It's not automatic, though. Sorry I can't be more specific. The provision is one of those things that never made its way into the IRC, but is sitting around in an enacted law.


Phil, thanks for expanding on my answer. I didn't mean to imply that the determination couldn't/wouldn't be retroactive, though my words certainly read that way. What I meant to state was that the only event that could change this person's unemployment benefit eligibility status is an IRS determination. All of the hopes and beliefs of everyone else won't make it so.

Ira
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