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IPFS News Link • TAXES: Federal

U.S. Cracks Down on ‘Contractors’ as a Tax Dodge

• NY Times
Federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors.

7 Comments in Response to

Comment by Anonymous
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Do I hear some bird chirpping outside my window that this country needs a lot more planes?  

Comment by Keith Hamburger
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This seems to be the major complaint of the suicide attack on an IRS building today.  How much more are people going to take?

(I have a copy of the suicide note if anyone is interested.)

Comment by foundZero
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I guess it's really safer for a larger company to source all it's contracted help from India and Pakistan as they've been doing.

For the little guy, for the independent, this is just another way of the IRS putting you out of  business. So many businesses are operating so close to the wire they can't withstand the impact of a full audit by the IRS. The resources, the added accounting, admin and legal fees associated, forget it.

To those who say "everybody has to pay their fair share", does "fair" include disposessing a man of this business and home? If a man has $5 to his name and owes $10 in taxes, is taking his $5 and leave him to starve "fair" in your book?

Comment by Justen Robertson
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I *am* an independent contractor who typically works from home via telecommuting or else works in a temporary space in clients' offices and this so-called "crackdown" is costing me work because clients are afraid the IRS is going to screw them for contracting with me. Protecting my "rights"? What right? The right to have my clients pay twice as much for my service whilst I collect only half? What about my right to freedom of association, freedom to contract, general economic freedom, or basic human right against slavery for that matter? I've said it before and I'll say it again, FUCK the IRS, the Federal Mafia, and their thugs. They are not our friends, they are not here to help, they are the lowest of criminal scum, con men and grifters.

Comment by Eldon Warman
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The identified problem in this article on 'contractor' v. 'employee' can easily be mitigated by filing a '$0.00 tax owing' IRS 1040 'return of income'.

The IRS 'Frivolous Tax Arguments' can be found here:,,id=159932,00.html

The method is extremely simple to do, and the method is totally free on this website: (works in Canada or USA - and has been proven effective since 2003).

Also, on that website, you can freely download a blog called 'the Name Game', which tells you how the Government sees you as a slave subject to having the fruits of your labor harvested as income tax.

Comment by PureTrust
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Comment by PureTrust
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From Title 26, the IRS Code

Section 3401. Definitions
(c)  Employee
For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.

Section 7701. Definitions
(c)  Includes and including
The terms “includes” and “including” when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.

Black's Law Dictionary, 6th Edition
Regarding "includes"
"Inclusio unius est exclusio alterius. The inclusion of one is the exclusion of another. The certain designation of one person is the exclusion of all others. ... This doctrine decrees that where law expressly describes [a] particular situation to which it shall apply, an irrefutable inference must be drawn that what is omitted or excluded was intended to be omitted or excluded."


The only thing included in the definition of "Employee" in IRS law, is Government workers. Private sector workers are not employees as far as defined by IRS law.

You can see this in the fact that all the inclusions in the "Employee" definition are Government workers. Yet because the word "includes" is used, other kinds of Government workers can be "included" besides the ones being listed. Yet, because the definition does not include workers outside of Government, they are excluded, according to Black's.

Private sector workers are not included in the meaning of "employee" in IRS law. Therefore, public sector workers do not owe the tax. IRS collections with regard to the public sector is a SCAM.