,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #dejc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,april #bh1 #bjad ,mr4
 ,mc,dermott introduc$ ! foll[+ bill2   
:i* 0 ref]r$ to ! ,committee on ,ways & 
,means  ,a ,,bill  ,to am5d ! ,int]nal  
,rev5ue ,code ( #aihf to p]mit !        
,secret>y ( ! ,treasury to issue        
prospective guidance cl>ify+ ! employm5t
 /atus ( individuals = purposes (       
employm5t taxes & to prev5t retroactive 
assessm5ts ) respect to su*             
cl>ifications4  #a4 ,%ort title2 f9d+s2 
purposes  7a7 ,%ort title ,?is ,act may 
be cit$ z ! ,fair ,play+ ,field ,act (  
#bjad4  7b7 ,f9d+s ,congress makes !    
foll[+ f9d+s3  7#a7 ,9 #aigh1 ,congress 
0 conc]n$ t lack ( cl>ity z to ! prop]  
classification ( "s work]s1 increas$    
,,irs en=cem5t activity1 & retroactive  
application by ,,irs ( int]pretations t 
7 arguably new _h caus$ h>d%ips = "s    
small bus9esses & o!r taxpay]s &        
confusion z to ! applicable rules4  7#b7
 ,to all[ "t to develop a compreh5sive  

approa* to ! problem1 ,congress enact$  
section #ecj ( ! ,rev5ue ,act ( #aigh z 
an int]im measure protect+ taxpay]s f   
liability = misclassification if !      
taxpay] has a reasonable basis =        
classify+ a work] z an indep5d5t        
contractor & meets c]ta9 o!r conditions4
 ,9 addition1 ! ,act prohibit$ !        
,secret>y ( ! ,treasury f publi%+       
regulations or rev5ue rul+s on work]s'  
employm5t tax /atus p5d+ ! expect$      
ne>-t]m enactm5t ( cl>ify+ legislation4 
7#c7 ,dur+ ! ensu+ #cc ye>s1 ,congress  
made section #ecj ( ! ,rev5ue ,act (    
#aigh p]man5t1 h[ev]1 *anges 9 work+    
relation%ips & ! cont9u$ prohibition on 
new guidance h increas$ ! unc]ta9ty z to
 ! prop] classification ( work]s4  7#d7 
,_m work]s are prop]ly classifi$ z      
indep5d5t contractors4 ,9 o!r in/ances1 
work]s :o are employees are be+ treat$ z
 indep5d5t contractors4 ,su*            
misclassification = tax purposes        
contributes to inequities 9 !           
competitive positions ( bus9esses & to !

 ,f$]al & ,/ate tax gap1 & may also     
result 9 misclassification = o!r        
purposes1 su* z d5ial ( unemploym5t     
b5efits1 workplace heal? & safety       
protections1 & retirem5t or o!r b5efits 
or protections available to employees4  
7#e7 ,work]s1 bus9esses1 & o!r taxpay]s 
w b5efit f cle> guidance reg>d+         
employm5t tax /atus4 ,9 ! int]e/ (      
fairness & 9 view ( _m s]vice recipi5ts'
 reliance on curr5t section #ecj1 su*   
guidance %\ld apply only prospectively4 
7c7 ,purposes ,! purposes ( ?is ,act are
 to p]mit ! ,secret>y ( ! ,treasury to  
provide guidance all[+ work]s &         
bus9esses to cle>ly und]/& ! prop]      
,f$]al tax classification ( work]s & to 
provide relief all[+ an ord]ly          
transition to new rules design$ to      
increase c]ta9ty & uni=mity ( treatm5t4 
#b4 ,au?ority to issue guidance cl>ify+ 
employm5t /atus = purposes ( employm5t  
taxes  7a7 ,9 g5]al ,*apt] #be ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new section3  

#ceaa4 ,au?ority to issue guidance      
cl>ify+ employm5t /atus  7a7 ,9 g5]al ,!
 ,secret>y %all issue su* regulations or
 o!r guidance z ! ,secret>y det]m9es to 
be necess>y or appropriate to cl>ify !  
prop] employm5t /atus ( individuals =   
purposes ( any tax impos$ by ?is        
subtitle4  7b7 ,prohibition on          
retroactive assessm5ts  7#a7 ,9 g5]al   
,if--  7,a7 = purposes ( any tax impos$ 
by ?is subtitle1 ! taxpay] did n treat  
an individual z an employee = any p]iod 
be=e ! reclassification date ) respect  
to su* individual1 &  7,b7 9 ! case (   
p]iods aft] ,decemb] #ca1 #aigh1 & be=e 
su* reclassification date1 all ,f$]al   
tax returns 7includ+ in=mation returns7 
requir$ to be fil$ by ! taxpay] )       
respect to su* individual = su* p]iod   
are fil$ on a basis consi/5t ) !        
taxpay]'s treatm5t ( su* individual z n 
be+ an employee1  !n1 = purposes (      
apply+ su* taxes = p]iods be=e su*      
reclassification date ) respect to !    
taxpay]1 ! individual %all be deem$ n to

 be an employee unless ! taxpay] _h no  
reasonable basis = n treat+ su*         
individual z an employee4  7#b7         
,/atutory /&>ds provid+ "o me?od (      
satisfy+ ! requirem5ts ( p>agraph 7#a7  
,= purposes ( p>agraph 7#a71 a taxpay]  
%all 9 any case be treat$ z hav+ a      
reasonable basis = n treat+ an          
individual z an employee = a p]iod if ! 
taxpay]'s treatm5t ( su* individual =   
su* p]iod 0 9 reasonable reliance on any
 ( ! foll[+3  7,a7 ,judicial prec$5t1   
publi%$ rul+s1 te*nical advice ) respect
 to ! taxpay]1 or a lett] rul+ to !     
taxpay]4  7,b7 ,a pa/ ,int]nal ,rev5ue  
,s]vice audit ( ! taxpay] 9 :i* !re 0 no
 assessm5t attributable to ! treatm5t 7=
 purposes ( any tax impos$ by ?is       
subtitle7 ( ! individuals hold+         
positions sub/antially simil> to !      
position held by su* individual4  7,c7  
,long-/&+ recogniz$ practice ( a        
significant segm5t ( ! indu/ry 9 :i* su*
 individual 0 engag$4  7#c7 ,consi/5cy  
requir$ 9 ! case ( prior tax treatm5t   

,p>agraph 7#a7 %all n apply ) respect to
 ! treatm5t ( any individual 7h]eaft] 9 
?is p>agraph ref]r$ to z ! reclassifi$  
individual7 = purposes ( any tax impos$ 
by ?is subtitle = any p]iod end+ aft]   
,decemb] #ca1 #aigh1 if ! taxpay] 7or a 
pr$ecessor7 has treat$ any individual   
hold+ a sub/antially simil> position z  
an employee = purposes ( any tax impos$ 
by ?is subtitle = any p]iod beg9n+ aft] 
,decemb] #ca1 #aigg1 & end+ be=e !      
reclassification date ) respect to su*  
reclassifi$ individual4  7c7 ,def9itions
 ,= purposes ( ?is section--  7#a7      
,reclassification date  7,a7 ,9 g5]al ,!
 t]m reclassification date means1 )     
respect to any individual1 ! e>li] (--  
7i7 ! fir/ day ( ! fir/ cal5d> qu>t]    
beg9n+ m ?an #ahj days aft] ! date ( an 
employee classification det]m9ation )   
respect to su* individual1 or  7ii7 !   
effective date ( ! fir/ applicable f9al 
regulation issu$ by ! ,secret>y "u      
subsection 7a7 ) respect to su*         
individual 7or1 if lat]1 ! fir/ day ( ! 

fir/ cal5d> qu>t] beg9n+ m ?an #ahj days
 aft] su* regulation is issu$74  7,b7   
,employee classification det]m9ation ,! 
t]m employee classification det]m9ation 
means1 ) respect to any individual1 a   
det]m9ation by ! ,secret>y1 9 connection
 ) an audit ( ! taxpay] :i* is describ$ 
9 section #gdcf & :i* comm5ces aft] !   
date :i* is #a ye> aft] ! date ( !      
enactm5t ( ?is section1 t a class (     
individuals hold+ positions ) su*       
taxpay] :i* are sub/antially simil> to !
 position held by su* individual are    
employees4  7,c7 ,fir/ applicable f9al  
regulation ,! t]m fir/ applicable f9al  
regulation means1 ) respect to any      
individual1 ! fir/ f9al regulation 7or  
o!r guidance ( g5]al applicability7 :i* 
sets =? ! factors = det]m9+ ! employm5t 
/atus ( a class ( individuals hold+     
positions sub/antially simil> to !      
position held by su* individual4  7#b7  
,employm5t /atus ,! t]m employm5t /atus 
means ! /atus ( an individual1 "u !     
usual common law rules applicable 9     

det]m9+ ! employ]-employee relation%ip1 
z an employee or z an indep5d5t         
contractor 7or o!r individual :o is n an
 employee74  7d7 ,cont9uation ( c]ta9   
special rules  7#a7 ,exception = c]ta9  
skill$ work]s ,subsection 7b7 %all n    
apply 9 ! case ( an individual :o1      
pursuant to an arrangem5t betwe5 !      
taxpay] & ano!r p]son1 provides s]vices 
= su* o!r p]son z an eng9e]1 design]1   
draft]1 comput] programm]1 sy/ems       
analy/1 or o!r simil>ly skill$ work]    
engag$ 9 a simil> l9e ( "w4  7#b7       
,notice ( availability ( section ,an    
(fic] or employee ( ! ,int]nal ,rev5ue  
,s]vice %all1 be=e or at ! comm5cem5t ( 
any audit inquiry relat+ to ! employm5t 
/atus ( "o or m individuals :o p]=m     
s]vices = ! taxpay]1 provide ! taxpay] )
 a writt5 notice ( ! provisions ( ?is   
section4  7#c7 ,rules relat+ to /atutory
 /&>ds ,= purposes ( subsection         
7b77#b7--  7,a7 a taxpay] may n rely on 
an audit comm5c$ aft] ,decemb] #ca1     
#aiif1 = purposes ( subp>agraph 7,b7    

!re( unless su* audit includ$ an        
exam9ation = purposes ( any tax impos$  
by ?is subtitle :e!r ! individual       
involv$ 7or any individual hold+ a      
position sub/antially simil> to !       
position held by ! individual involv$7  
%\ld be treat$ z an employee ( !        
taxpay]1  7,b7 9 no ev5t %all !         
significant segm5t requirem5t (         
subp>agraph 7,c7 !re( be con/ru$ to     
require a reasonable %[+ ( ! practice ( 
m ?an #be p]c5t ( ! indu/ry 7det]m9$ by 
n tak+ into acc\nt ! taxpay]71 &  7,c7 9
 apply+ ! long-/&+ recogniz$ practice   
requirem5t ( subp>agraph 7,c7 !re(--    
7i7 su* requirem5t %all n be con/ru$ z  
requir+ ! practice to h cont9u$ = m ?an 
#aj ye>s1 &  7ii7 a practice %all n fail
 to be treat$ z long-/&+ m]ely because  
su* practice began aft] #aigh4  7#d7    
,availability ( safe h>bors ,no?+ 9 ?is 
section %all be con/ru$ to provide t    
subsection 7b7 only applies :]e !       
individual involv$ is o!rwise an        
employee ( ! taxpay]4  7#e7 ,burd5 (    

pro(  7,a7 ,9 g5]al ,if--  7i7 a taxpay]
 e/abli%es a prima facie case t x 0     
reasonable n to treat an individual z an
 employee = purposes ( subsection 7b71 &
  7ii7 ! taxpay] has fully coop]at$ )   
reasonable reque/s f ! ,secret>y1  !n ! 
burd5 ( pro( ) respect to su* treatm5t  
%all be on ! ,secret>y4  7,b7 ,exception
 = o!r reasonable basis ,9 ! case ( any 
issue involv+ :e!r ! taxpay] _h a       
reasonable basis n to treat an          
individual z an employee = purposes (   
subsection 7b71 subp>agraph 7,a7 %all   
only apply = purposes ( det]m9+ :e!r !  
taxpay] meets ! requirem5ts (           
subp>agraph 7,a71 7,b71 or 7,c7 (       
subsection 7b77#b74  7#f7 ,pres]vation (
 prior p]iod safe h>bor ,if--  7,a7 an  
individual w\ld 7b = ! treatm5t ref]r$  
to 9 subp>agraph 7,b77 be deem$ n to be 
an employee ( ! taxpay] "u subsection   
7b7 = any prior p]iod1 &  7,b7 su*      
individual is treat$ by ! taxpay] z an  
employee = purposes ( ! taxes impos$ by 
?is subtitle = any subsequ5t p]iod1  !n1

 = purposes ( apply+ su* taxes = su*    
prior p]iod ) respect to ! taxpay]1 !   
individual %all be deem$ n to be an     
employee4  7#g7 ,sub/antially simil>    
position ,= purposes ( subsection 7b7 & 
?is subsection1 ! det]m9ation z to :e!r 
an individual holds a position          
sub/antially simil> to a position held  
by ano!r individual %all include        
consid]ation ( ! relation%ip betwe5 !   
taxpay] & su* individuals4  7#h7        
,treatm5t ( te/ room sup]visors &       
proctors :o assi/ 9 ! adm9i/ration (    
college entrance & placem5t exams  7,a7 
,9 g5]al ,9 ! case ( an individual      
describ$ 9 subp>agraph 7,b7 :o is       
provid+ s]vices z a te/ proctor or room 
sup]visor by assi/+ 9 ! adm9i/ration (  
college entrance or placem5t            
exam9ations1 subsection 7b7 %all be     
appli$ to su* s]vices p]=m$ aft]        
,decemb] #ca1 #bjjf 7& remun]ation paid 
= su* s]vices71 )\t reg>d to p>agraph   
7#c7 !re(4  7,b7 ,applicability ,an     
individual is describ$ 9 ?is subp>agraph

 if ! individual--  7i7 is provid+ !    
s]vices describ$ 9 subsection 7b7 to an 
organization describ$ 9 section #eja7;c7
 & exempt f tax "u section #eja7;a71 &  
7ii7 is n o!rwise treat$ z an employee (
 su* organization = purposes ( ?is      
subtitle4  7#i7 ,treatm5t ( securities  
brok] deal]s ,9 det]m9+ = purposes ( ?is
 title :e!r a regi/]$ repres5tative ( a 
securities brok]-deal] is an employee 7z
 def9$ 9 section #caba7;d771 no weight  
%all be giv5 to in/ructions f ! s]vice  
recipi5t :i* are impos$ only 9          
compliance ) inve/or protection /&>ds   
impos$ by ! ,f$]al ,gov]nm5t1 any ,/ate 
gov]nm5t1 or a gov]n+ body pursuant to a
 delegation by a ,f$]al or ,/ate ag5cy4 
7e7 ,/atem5ts to indep5d5t contractors  
7#a7 ,9 g5]al ,ea* p]son :o contracts = 
! s]vices ( an indep5d5t contractor on a
 regul> & ongo+ basis1 )9 ! scope ( su* 
p]son's trade or bus9ess1 %all provide a
 writt5 /atem5t to su* indep5d5t        
contractor notify+ su* indep5d5t        
contractor ( ! ,f$]al tax obligations ( 

an indep5d5t contractor1 ! labor &      
employm5t law protections t d n apply to
 indep5d5t contractors1 & ! "r ( su*    
indep5d5t contractor to seek a /atus    
det]m9ation f ! ,int]nal ,rev5ue        
,s]vice4  7#b7 ,indep5d5t contractor ,= 
purposes ( ?is subsection1 ! t]m        
indep5d5t contractor means any          
individual :o is n treat$ z an employee 
by ! p]son receiv+ ! s]vices ref]r$ to 9
 p>agraph 7#a74  7#c7 ,tim+ ( /atem5t   
,except z o!rwise provid$ by !          
,secret>y1 ! /atem5t requir$ "u p>agraph
 7#a7 %all be provid$ )9 a reasonable   
p]iod ( ent]+ into ! contract ref]r$ to 
9 p>agraph 7#a74  7#d7 ,developm5t (    
model /atem5t ,! ,secret>y %all develop 
model mat]ials = provid+ ! /atem5t      
requir$ "u p>agraph 7#a74  4  7b7 ,r$uc$
 p5alty n applicable 9 cases (          
noncompliance ) guidance )\t reasonable 
basis ,subsection 7c7 ( section #ceji ( 
su* ,code is am5d$--  7#a7 by /rik+ if  
su* liability & ins]t+  if-- 7#a7 su*   
liability  1 &  7#b7 by /rik+ ! p]iod at

 ! end & ins]t+  1 or 7#b7 su* liability
 relates to an individual :o is treat$ z
 an employee "u regulations or o!r      
guidance issu$ by ! ,secret>y "u section
 #ceaa7;a7 & ! taxpay] lacks a          
reasonable basis = treat+ ! individual z
 o!r ?an an employee4  ,9 ! case ( a    
taxpay] :i* has receiv$ a f9al writt5   
det]m9ation f ! ,int]nal ,rev5ue ,s]vice
 hold+ t ! individual ref]r$ to 9       
p>agraph 7#b7 7or ano!r individual :o   
holds a position ) ! taxpay]            
sub/antially simil> to ! position held  
by su* individual7 is an employee1 su*  
taxpay] %all be treat$ = purposes (     
p>agraph 7#b7 z lack+ a reasonable basis
 = treat+ su* individual z o!r ?an an   
employee ) respect to p]iods beg9n+ on &
 aft] ! fir/ day ( ! fir/ cal5d> qu>t]  
beg9n+ m ?an #ahj days aft] ! date ( su*
 writt5 det]m9ation unless ! taxpay]    
e/abli%es by cle> & conv9c+ evid5ce t ! 
taxpay] has a reasonable basis = su*    
treatm5t4 4  7c7 ,con=m+ am5dm5ts  7#a7 
,p>agraph 7#b7 ( section #fgbd7;d7 ( su*

 ,code is am5d$ by /rik+ or at ! end (  
subp>agraph 7,,gg71 by /rik+ ! p]iod at 
! end ( subp>agraph 7,,hh7 & ins]t+ 1   
or1 & by ins]t+ aft] subp>agraph 7,,hh7 
! foll[+ new subp>agraph3  7,,ii7       
section #ceaa7;e7 7relat+ to /atem5ts to
 indep5d5t contractors74  4  7#b7       
,p>agraph 7#b7 ( section #gdcf7;a7 ( su*
 ,code is am5d$ by /rik+ subsection 7a7 
( section #ecj ( ! ,rev5ue ,act ( #aigh 
& ins]t+ section #ceaa7;b74  7#c7 ,!    
table ( sections = *apt] #be ( su* ,code
 is am5d$ by add+ at ! end ! foll[+ new 
item3  ,sec4 #ceaa4 ,au?ority to issue  
guidance cl>ify+ employm5t /atus4  4    
7d7 ,t]m9ation ( section #ecj ( !       
,rev5ue ,act ( #aigh ,! ,rev5ue ,act (  
#aigh is am5d$ by /rik+ section #ecj4   
7e7 ,reports on work] misclassification 
,beg9n+ ) ! fir/ fiscal ye> beg9n+ aft] 
! date ! fir/ regulation or o!r guidance
 is issu$ = public comm5t "u section    
#ceaa7;a7 ( ! ,int]nal ,rev5ue ,code (  
#aihf 7z add$ by ?is section73  7#a7 ,a 
report ea* fiscal ye> on work]          

classification :i* %all include ! total 
numb] ( exam9ations ( employ]s initiat$ 
because ( suspect$ work] classification 
issues1 ! total numb] ( exam9ations t   
includ$ det]m9ations on work]           
classification issues1 ! am\nt (        
additional tax liabilities associat$ )  
work] classification en=cem5t actions1 !
 numb] ( work]s reclassifi$ z a result (
 ^! actions1 ! numb] ( reque/s =        
,det]m9ation ( ,work] ,/atus 7,=m       
,,ss-#h71 & te*nical guidance on h[ to  
und]/& ! data provid$ 9 ! report4  7#b7 
,a report ea* fiscal ye> 9 :i* new      
/ati/ically valid data is compil$ &     
int]pret$ on work] classification1      
prep>$ on ! basis ( in=mation ga!r$ dur+
 an ,employm5t ,tax ,/udy conduct$ by ! 
,national ,rese>* ,program 7,,nrp7 ( !  
,int]nal ,rev5ue ,s]vice4 ,su* report   
%all provide /ati/ical e/imates ( !     
numb] ( employ]s misclassify+ work]s1 ! 
numb] ( work]s misclassifi$1 ! indu/ries
 involv$1 data int]pretations &         
conclusions1 & a description ( ! impact 

( improp] work] classification on !     
employm5t tax gap4  7f7 ,effective dates
  7#a7 ,delay$ effective date (         
regulations & guidance ,except z provid$
 9 p>agraph 7#b71 any regulation or o!r 
guidance issu$ "u section #ceaa7;a7 ( ! 
,int]nal ,rev5ue ,code ( #aihf1 z add$  
by ?is section1 %all n apply to s]vices 
r5d]$ be=e ! date :i* is #a ye> aft] !  
date ( ! enactm5t ( ?is ,act4  7#b7     
,treatm5t ( securities brok] deal]s     
,p>agraph 7#i7 ( section #ceaa7;d7 ( !  
,int]nal ,rev5ue ,code ( #aihf1 z add$  
by ?is section1 %all apply to s]vices   
p]=m$ aft] ,decemb] #ca1 #aiig4  7#c7   
,au?ority to issue regulations &        
guidance imm$iately ,s mu* ( ! am5dm5t  
made by subsection 7d7 z relates to     
subsection 7b7 ( section #ecj ( !       
,rev5ue ,act ( #aigh %all take effect on
 ! date ( ! enactm5t ( ?is ,act4  7#d7  
,delay$ t]m9ation ( rema9d] ( ,section  
#ecj ( ! ,rev5ue ,act ( #aigh ,except z 
provid$ 9 p>agraph 7#c71 ! am5dm5ts made
 by subsections 7c77#a7 & 7d7 %all apply

 to s]vices r5d]$ on or aft] ! date :i* 
is #a ye> aft] ! date ( ! enactm5t ( ?is
 ,act4