,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #ccif  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #be1 #bjag,mr4  
,pauls5 introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to *ange ! classification
 ( employ]s & employees = s]vices       
provid]s4  #a4 ,det]m9ation ( work]     
classification  7a7 ,9 g5]al ,*apt] #gi 
( ! ,int]nal ,rev5ue code ( #aihf is    
am5d$ by add+ at ! end ! foll[+ new     
section3  #ggjf4 ,det]m9ation ( work]   
classification  7a7 ,9 g5]al ,= purposes
 ( ?is title 7& not)/&+ any provision ( 
?is title n conta9$ 9 ?is section to !  
contr>y71 if ! requirem5ts ( subsections
 7b71 7c71 & 7d7 are met ) respect to   
any s]vice p]=m$ by a 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 any 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    
,g5]al s]vice provid] requirem5ts  7#a7 
,9 g5]al ,! requirem5ts ( ?is subsection
 are met ) respect to any s]vice if !   
s]vice provid] ei!r-- 7,a7 meets !      
requirem5ts ( p>agraph 7#b7 ) respect to
 su* s]vice1 or  7,b7 9 ! case a s]vice 
provid] engag$ 9 ! trade or bus9ess (   
sell+ 7or solicit+ ! sale (7 goods or   
s]vices1 meets ! requirem5ts ( p>agraph 
7#c7 ) respect to su* s]vice4  7#b7     
,g5]al requirem5ts ,! requirem5ts ( ?is 
p>agraph are met ) respect to any s]vice
 if ! s]vice provid]1 9 connection )    
p]=m+ ! s]vice--  7,a7 ei!r-- 7i7 incurs
 significant unreimburs$ exp5ses z x    
relates to total exp5se1 or  7ii7 risks 
income fluctuations because remun]ation 
) respect to su* s]vice is n relat$ to !
 exp5ses incurr$1  7,b7 agrees to p]=m !
 s]vice = a p>ticul> am\nt ( "t1 to     
a*ieve a specific result1 or to complete
 a specific task1 &  7,c7 at lea/ "o ( !
 foll[+3 7i7 has an significant         

unreimburs$ exp5ses z x relates to total
 exp5se 9 assets or tra9+1  7ii7 is n   
requir$ to p]=m s]vices exclusively = ! 
s]vice recipi5t1 or  7iii7 has n p]=m$  
s]vices = ! s]vice recipi5t z an        
employee dur+ ! #a-ye> p]iod end+ ) !   
date ( ! comm5cem5t ( s]vices "u !      
contract describ$ 9 subsection 7d74     
7#c7 ,alt]native requirem5ts ) respect  
to sales p]sons ,9 ! case ( a s]vice    
provid] engag$ 9 ! trade or bus9ess (   
sell+ 7or solicit+ ! sale (7 goods or   
s]vices1 ! requirem5ts ( ?is p>agraph   
are met ) respect to any s]vice if--    
7,a7 ! s]vice provid] is comp5sat$      
prim>ily on a commission basis1 &  7,b7 
sub/antially all ! comp5sation = su*    
s]vice is directly relat$ to sales (    
goods or s]vices r ?an to ! numb] ( h\rs
 work$ to a c]ta9 level or limit (      
highly comp5sat$ individuals4  7c7      
,place ( bus9ess or own equipm5t        
requirem5t ,! requirem5t ( ?is          
subsection is met ) respect to any      
s]vice if ! s]vice provid]--  7#a7 has a

 pr9cipal place ( bus9ess1 :i* c be home
 or mobile-bas$1 or1  7#b7 provides !   
s]vice prim>ily us+ equipm5t = :i* !    
s]vice provid] be>s ! ultimate f9ancial 
responsibility4  7d7 ,writt5 contract   
requirem5t ,! requirem5ts ( ?is         
subsection are met ) respect to any     
s]vice if su* s]vice is p]=m$ pursuant  
to a writt5 contract betwe5 ! s]vice    
provid] & ! s]vice recipi5t 7or payor7  
:i* meets ! foll[+ requirem5ts3 7#a7 ,! 
contract includes ea* ( ! foll[+3  7,a7 
,! s]vice provid]'s "n & address4  7,b7 
,a /atem5t t ! s]vice provid] w n be    
treat$ z an employee ) respect to !     
s]vices provid$ pursuant to ! contract =
 purposes ( ?is title4  7,c7 ,a /atem5t 
t ! s]vice recipi5t 7or ! payor7 w      
report to ! ,int]nal ,rev5ue ,s]vice !  
comp5sation payable pursuant to !       
contract consi/5t ) ! requirem5ts ( ?is 
title4  7,d7 ,a /atem5t t ! s]vice      
provid] is responsible = paym5t (       
,f$]al1 ,/ate1 & local taxes1 includ+   
self-employm5t taxes1 on comp5sation    

payable pursuant to ! contract4  7,e7 ,a
 /atem5t t ! contract is int5d$ to be   
consid]$ a contract describ$ 9 ?is      
subsection4  7#b7 ,! t]m ( ! contract   
does n exce$ #a ye>4 ,! prec$+ s5t5ce   
%all n prev5t "o or m subsequ5t writt5  
r5ewals ( ! contract f satisfy+ !       
requirem5ts ( ?is subsection if ! t]m ( 
ea* su* r5ewal does n exce$ #a ye> & if 
! in=mation requir$ "u p>agraph         
7#a77;,a7 is updat$ z ne$$ 9 connection 
) ea* su* r5ewal4  7#c7 ,! contract 7or 
r5ewal7 is sign$ by bo? ! s]vice        
recipi5t 7or payor7 & ! s]vice provid] n
 lat] ?an ! date on :i* ! aggregate     
paym5ts made by ! s]vice recipi5t to !  
s]vice provid] exce$s #fjj = ! ye> cov]$
 by ! contract 7or r5ewal74  7e7        
,report+ requirem5ts ,if any s]vice     
recipi5t or payor fails to meet !       
applicable report+ requirem5ts ( section
 #fjda7;a7 or #fjda;,a7a7 = any taxable 
ye> ) respect to any s]vice provid]1 ?is
 section %all n apply = purposes ( mak+ 
any det]m9ation ) respect to ! liability

 ( su* s]vice recipi5t or payor = any   
tax ) respect to su* s]vice provid] =   
su* p]iod4 ,= purposes ( ! prec$+       
s5t5ce1 su* report+ requirem5ts %all be 
treat$ z met if ! failure to satisfy su*
 requirem5ts is due to reasonable cause 
& n willful neglect4  7f7 ,exception =  
s]vices provid$ by own] ,?is section    
%all n apply ) respect to any s]vice    
provid$ by a s]vice provid] to a s]vice 
recipi5t if ! s]vice provid] owns any   
int]e/ 9 ! s]vice recipi5t or any payor 
) respect to ! s]vice provid$4 ,! prec$+
 s5t5ce %all n apply 9 ! case ( a s]vice
 recipi5t ! /ock ( :i* is regul>ly trad$
 on an e/abli%$ securities m>ket4  7g7  
,limitation on reclassification by      
secret>y ,= purposes ( ?is title--  7#a7
 ,effect ( reclassification on s]vice   
recipi5ts & payors ,a det]m9ation by !  
,secret>y t a s]vice recipi5t or a payor
 %\ld h treat$ a s]vice provid] z an    
employee %all be effective ) respect to 
! s]vice recipi5t or payor no e>li] ?an 
! notice date if-- 7,a7 ! s]vice        

recipi5t or ! payor ent]$ into a writt5 
contract ) ! s]vice provid] :i* meets ! 
requirem5ts ( subsection 7d71  7,b7 !   
s]vice recipi5t or ! payor satisfi$ !   
applicable report+ requirem5ts ( section
 7a7 or #fjda;,a7a7 = all relevant      
taxable ye>s ) respect to ! s]vice      
provid]1 &  7,c7 ! s]vice recipi5t or ! 
payor demon/rates a reasonable basis =  
hav+ det]m9$ t ! s]vice provid] %\ld n  
be treat$ z an employee "u ?is section &
 t su* det]m9ation 0 made 9 good fai?4  
7#b7 ,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#c7 ,effect (     
reclassification on s]vice provid]s ,a  
det]m9ation by ! ,secret>y t a s]vice   
provid] %\ld h be5 treat$ z an employee 
%all be effective ) respect to ! s]vice 
provid] no e>li] ?an ! notice date if-- 
7,a7 ! s]vice provid] ent]$ into a      
writt5 contract ) ! s]vice recipi5t or  
payor :i* meets ! requirem5ts (         
subsection 7d71  7,b7 ! s]vice recipi5t 
or payor satisfi$ ! applicable report+  
requirem5ts ( sections #fjab7;a7 & #fjag
 = all relevant taxable ye>s ) respect  
to ! s]vice provid]1 or  7,c7 ! s]vice  
recipi5t demon/rates a basis = det]m9+ t
 ! s]vice provid] is n an employee "u   
?is section & t su* det]m9ation 0 made 9
 good fai?4  7#d7 ,notice date ,=       
purposes ( ?is subsection1 ! t]m notice 
date means ! #cj? day aft] ! e>lie/ (-- 
7,a7 ! date on :i* ! fir/ lett] (       

propos$ defici5cy :i* all[s ! s]vice    
provid]1 ! s]vice recipi5t1 or ! payor  
an opportunity = adm9i/rative review 9 !
 ,int]nal ,rev5ue ,s]vice ,(fice (      
,appeals is s5t1  7,b7 ! date on :i* a  
defici5cy notice "u section #fbab is    
s5t1 or  7,c7 ! date on :i* a notice (  
det]m9ation "u section #gdcf7;b77#b7 is 
s5t4  7#e7 ,no re/riction on            
adm9i/rative or judicial review ,no?+ 9 
?is subsection %all be con/ru$ z limit+ 
any provision ( law :i* provides an     
opportunity = adm9i/rative or judicial  
review ( a det]m9ation by ! ,secret>y4  
7h7 ,def9itions ,= purposes ( ?is       
section--  7#a7 ,s]vice provid]  7,a7 ,9
 g5]al ,! t]m s]vice provid] means any  
qualifi$ p]son :o p]=ms s]vice = ano!r  
qualifi$ p]son4  7,b7 ,qualifi$ p]son ,!
 t]m qualifi$ p]son means--  7i7 any    
natural p]son1 or  7ii7 any entity4     
7#b7 ,s]vice recipi5t ,! t]m s]vice     
recipi5t means ! p]son or entity = :om !
 s]vice provid] p]=ms su* ,s]vice       
pursuant to a writt5 contract4  7#c7    

,payor ,! t]m payor means any p]son or  
entity :o pays ! s]vice provid] = p]=m+ 
su* s]vice4  7i7 ,regulations ,not)/&+  
section #ecj7;d7 ( ! ,rev5ue ,act (     
#aigh1 ! ,secret>y may issue regulations
 only to ! ext5t t ! ,secret>y det]m9es 
are necess>y to c>ry out ! provisions ( 
?is section4  7j7 ,rule ( con/ruction   
,no provision ( ?is section may be      
con/ru$ to exp& ! circum/ances "u :i* a 
s]vice provid] may be treat$ z an       
employee or a s]vice recipi5t may be    
treat$ z an employ]4  7k7 ,application 9
 ord9>y c\rse ( trade or bus9ess ,?is   
section %all apply reg>dless ( :e!r su* 
s]vice is p]=m$ 9 ! ord9>y or relat$    
c\rse ( a trade or bus9ess ( ! s]vice   
recipi5t4  4  7b7 ,report+ ,section     
#fjda;,a ( su* ,code is am5d$ by add+ at
 ! end ! foll[+ new subsection3  7g7    
,special rules = c]ta9 p]sons classifi$ 
z n employees ,9 ! case ( any s]vice    
recipi5t requir$ to make a return "u    
subsection 7a7 ) respect to comp5sation 
to :i* section #ggjf7;a7 applies-- 7#a7 

su* return %all include--  7,a7 !       
aggregate am\nt ( su* comp5sation paid  
to ea* p]son or entity ^: "n is requir$ 
to be includ$ on su* return1  7,b7 !    
aggregate am\nt d$uct$ & )held "u       
section #cdjb7s7 ) respect to su*       
comp5sation1 &  7,c7 an indication (    
:e!r a copy ( ! contract describ$ 9     
section #ggjf7;d7 is on file ) ! s]vice 
recipi5t or payor1 &  7#b7 ! /atem5t    
requir$ to be furni%$ "u subsection 7e7 
%all include ! in=mation describ$ 9     
p>agraph 7#a7 ) respect to ! s]vice     
provid] to :om su* /atem5t is furni%$4  
,t]ms us$ 9 ?is subsection :i* are also 
us$ 9 section #ggjf %all h ! same mean+ 
z :5 us$ 9 su* section4  4  7c7 ,cl]ical
 am5dm5t ,! table ( sections = *apt] #gi
 ( su* ,code is am5d$ by add+ at ! end !
 foll[+ new item3  ,sec4 #ggjf4         
,det]m9ation ( work] classification4  4 
7d7 ,effective date ,! am5dm5ts made by 
?is section %all apply to s]vices p]=m$ 
aft] ,decemb] #ca1 #bjaf4