,i  #aad? ,,congress  #a/ ,session  ,h4 
,r4 #bdhc  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,may #bj1 #bjae ,mr4  
,pauls5 introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to provide /&>ds =       
det]m9+ employm5t /atus1 & = o!r        
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,indep5d5t ,contractor ,tax
 ,fairness & ,simplification ,act (     
#bjae4  #b4 ,f9d+s ,! ,congress f9ds !  
foll[+3  7#a7 ,indep5d5t contractors    
play a vital role 9 our economy4  7#b7  
,indep5d5t contractors embrace !        
entrepr5eurial _s ( our c\ntry & are    
free to seek economic opportunities t   
be/ fit _! ne$s4  7#c7 ,_m small        
bus9esses />t z an indep5d5t contractor 
& gr[ creat+ jobs = o!r individuals4    
7#d7 ,! prop] classification (          
individuals z employees & indep5d5t     
contractors is a significant            
responsibility = bus9esses4  7#e7 ,!    
rules & guidel9es = det]m9+ :e!r an     

individual is an indep5d5t contractor or
 an employee lack cl>ity & consi/5cy4   
7#f7 ,x is 9 ! be/ int]e/s ( taxpay]s1 !
 ,f$]al ,gov]nm5t & ! bus9ess community 
to h fair & objective rules = det]m9+ :o
 is an indep5d5t contractor & :o is an  
employee4  #c4 ,/&>ds = det]m9+         
employm5t /atus  7a7 ,9 g5]al ,*apt] #be
 ( ! ,int]nal ,rev5ue ,code ( #aihf     
7g5]al provisions relat+ to employm5t   
taxes7 is am5d$ by add+ aft] section    
#ceaa ! foll[+ new sections3  #ceab4    
,controv]sies involv+ :e!r individuals  
are employees = purposes ( ! employm5t  
taxes  7a7 ,t]m9ation ( c]ta9 employm5t 
tax liability  7#a7 ,9 g5]al ,if--  7,a7
 = purposes ( employm5t taxes1 ! taxpay]
 did n treat an individual z an employee
 = any p]iod1 &  7,b7 9 ! case ( p]iods 
aft] ,decemb] #ca1 #aigh1 all 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 = su*    
p]iod ) 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[+-- 7,a7 judicial prec$5t1    
publi%$ rul+s1 te*nical advice ) respect
 to ! taxpay]1 or a lett] rul+ to !     
taxpay]1  7,b7 a pa/ ,int]nal ,rev5ue   
,s]vice audit ( ! taxpay] 9 :i* !re 0 no
 assessm5t attributable to ! treatm5t 7=
 employm5t tax purposes7 ( ! individuals
 hold+ positions sub/antially simil> to 
! position held by ?is individual1 or   
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 = employm5t
 tax purposes = any p]iod end+ aft]     
,decemb] #ca1 #bjae1 if ! taxpay] 7or a 
pr$ecessor7 has treat$ any individual   
hold+ a sub/antially simil> position z  
an employee = purposes ( ! employm5t    
taxes = any p]iod beg9n+ aft] ,decemb]  
#ca1 #bjad4  7#d7 ,refund or cr$it (    
ov]paym5t ,if refund or cr$it ( any     
ov]paym5t ( an employm5t tax result+ f !
 application ( p>agraph 7#a7 is n b>r$  
on ! date ( ! enactm5t ( ?is section by 
any law or rule ( law1 ! p]iod = fil+ a 
claim = refund or cr$it ( su* ov]paym5t 
7to ! ext5t attributable to !           
application ( p>agraph 7#a77 %all n     
expire be=e ! date #a ye> aft] ! date ( 
! enactm5t ( ?is section4  7b7          
,prohibition aga9/ regulations & rul+s  
on employm5t /atus ,except = purposes ( 
provid+ ,rev5ue ,rul+s ) respect to     
section #ceac1 no regulation or ,rev5ue 

,rul+ %all be publi%$ on or aft] ! date 
( ! enactm5t ( ?is section by !         
,dep>tm5t ( ! ,treasury 7includ+ !      
,int]nal ,rev5ue ,s]vice7 ) respect to !
 employm5t /atus ( any individual =     
purposes ( ! employm5t taxes4  7c7      
,def9itions ,= purposes ( ?is section-- 
7#a7 ,employm5t tax ,! t]m employm5t tax
 means any tax impos$ by ?is subtitle4  
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 ,exception ,?is section
 %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  7e7        
,special rules = application ( section  
7#a7 ,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#b7 ,rules relat+ to  
/atutory /&>ds ,= purposes ( subsection 
7a77#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 = employm5t tax purposes (   
: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#c7    
,availability ( safe h>bors ,no?+ 9 ?is 
section %all be con/ru$ to provide t    
subsection 7a7 only applies :]e !       
individual involv$ is o!rwise an        
employee ( ! taxpay]4  7#d7 ,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 ( ?is section1 &   
7ii7 ! taxpay] has fully coop]at$ )     
reasonable reque/s f ! ,secret>y ( !    
,treasury or 8 delegate1  !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 ( ?is section1      
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 7a77#b74  7#e7     
,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 7a7 = any prior p]iod1 & 
7,b7 su* individual is treat$ by !      
taxpay] z an employee = employm5t tax   
purposes = 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#f7 ,sub/antially simil>    
position ,= purposes ( ?is section1 !   
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     
#ceac4 ,safe h>bor /&>ds = det]m9+      
employm5t /atus  7a7 ,g5]al rule ,=     
purposes ( ?is title1 if ! requirem5ts (
 subsection 7c7 are met ) respect to any
 s]vice p]=m$ by any s]vice provid]1 !n 

) respect to su* s]vice--  7#a7 ! s]vice
 provid] %all n be treat$ z an employee1
  7#b7 ! s]vice recipi5t %all n be      
treat$ z an employ]1  7#c7 ! payor %all 
n be treat$ z an employ]1 &  7#d7       
comp5sation paid or receiv$ = su* s]vice
 %all n be treat$ z paid or receiv$ )   
respect to employm5t4  7b7 ,/atutory    
employees ,no?+ 9 ?is section %all      
sup]s$e ! categories ( employees        
describ$ 9 section #caba7;d77#c74  7c7  
,requirem5ts  7#a7 ,9 g5]al ,!          
requirem5ts ( ?is subsection are met if 
! requirem5ts ( p>agraphs 7#b7 & 7#c7   
are met4  7#b7 ,inve/m5t or income      
fluctuation ,a s]vice provid] meets !   
requirem5ts ( ?is p>agraph if ! s]vice  
provid]-- 7,a7 incurs significant       
f9ancial responsibility = provid+ &     
ma9ta9+ ! necess>y equipm5t & facilities
 to p]=m ! "w outl9$ 9 _! qualifi$      
agreem5t1 &  7,b7 ei!r-- 7i7 incurs     
unreimburs$ exp5ses1 or  7ii7 risks     
income fluctuations because !           
remun]ation ) respect to su* s]vice is  

directly relat$ to sales or o!r output r
 ?an solely to ! numb] ( h\rs actually  
work$ or exp5ses incurr$4  7#c7 ,control
 ( "t work$ & p]=mance ( s]vices ,a     
s]vice provid] meets ! requirem5ts ( ?is
 p>agraph if ! s]vice provid]--  7,a7 is
 comp5sat$ ^u factors relat$ to ! "w    
p]=m$1 su* z a p]c5tage ( rev5ue or     
s*$ul$ rates1 & n solely on ! basis (   
h\rs or "t exp5d$1 &  7,b7 sub/antially 
controls ! means & mann] ( p]=m+ !      
s]vices1 9 con=mance ) regulatory       
requirem5ts1 ! specifications ( ! s]vice
 recipi5t or payor & any additional     
requirem5ts specifi$ 9 ! qualifi$       
agreem5t4  7d7 ,def9itions ,= ! purposes
 ( ?is section-- 7#a7 ,s]vice provid] ,!
 t]m s]vice provid] means any individual
 or entity t p]=ms s]vice = ano!r       
company "u a qualifi$ agreem5t4  7#b7   
,s]vice recipi5t ,! t]m s]vice recipi5t 
means ! p]son or entity = :om ! s]vice  
provid] p]=ms su* s]vice4  7#c7 ,payor  
,! t]m payor means ! p]son or entity t  
pays ! s]vice provid] = ! p]=mance ( su*

 s]vice 9 ! ev5t t ! s]vice recipi5ts d 
n pay ! s]vice provid]4  7#d7           
,exceptions ,! t]ms s]vice recipi5t &   
payor d n include any entity :i* is own$
 9 :ole or 9 "p by ! s]vice provid]4    
7#e7 ,qualifi$ agreem5t ,! t]m qualifi$ 
agreem5t means a writt5 contract betwe5 
a s]vice provid] & ! s]vice recipi5t =  
:om ! s]vices are p]=m$ or ! payor t    
provides t ! s]vice provid]--  7,a7 w n 
be treat$ z an employee ) respect to su*
 s]vices = ! purpose ( ?is title1 &     
7,b7 has be5 in=m$ ( ! ,f$]al tax       
obligations result+ f su* treatm5t4  4  
7b7 ,con=m+ am5dm5ts  7#a7 ,section #ecj
 ( ! ,rev5ue ,act ( #aigh is h]eby      
repeal$4  7#b7 ,! table ( sections =    
*apt] #be ( su* ,code is am5d$ by add+  
at ! end ! foll[+ new items3  ,sec4     
#ceab4 ,controv]sies involv+ :e!r       
individuals are employees = purposes ( !
 employm5t taxes4 ,sec4 #ceac4 ,safe    
h>bor /&>ds = det]m9+ employm5t /atus4  
4  7c7 ,effective dates  7#a7 ,9 g5]al  
,except z provid$ 9 p>agraph 7#b71 !    

am5dm5ts made by ?is ,act %all take     
effect beg9n+ on ! fir/ day ( ! fir/    
cal5d> ye> beg9n+ aft] ! date ( enactm5t
 ( ?is ,act4  7#b7 ,repeal ( section    
#ecj ,! am5dm5t made by subsection      
7b77#a7 %all apply to p]iods 9 cal5d>   
ye>s beg9n+ aft] ! date ( enactm5t ( ?is
 ,act4