Summary: H.R.5460 — 96th Congress (1979-1980)All Information (Except Text)

There is one summary for H.R.5460. Bill summaries are authored by CRS.

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Introduced in House (09/28/1979)

Independent Contractor Tax Act of 1979 - Amends the Internal Revenue Code to specify standards for determining whether certain individuals qualify as independent contractors for purposes of social security taxation. Treats an individual as an independent contractor if such individual: (1) controls the total number and scheduling of his work hours; (2) pays fair rental value for business premises at which he performs more than one half of his services; (3) earns income based upon sales or output rather than upon number of hours worked, or as a result of business investments (other than in vehicles, tools, samples, etc.) which enable him to perform services for which he is remunerated; and (4) performs services pursuant to a prior written contract which specifies that the individual performing services is not an employee for purposes of social security and unemployment taxation and which provides written notice to such individual of his responsibility with respect to payment of income and self-employment taxes. Requires the recipient of services performed by an individual claiming independent contractor status to file returns disclosing payments made to such individual. Provides that the criteria established by this Act shall not be applicable to certain employees (i.e. agent-drivers, commission-drivers, full-time life insurance salesmen, home workers, and traveling or city salesmen) who are statutorily designated as employees for purposes of social security taxation.

Provides that the failure of an individual claiming independent contractor status to meet the criteria established by this Act shall not create an inference that such an individual is an employee or that the recipient of his services is an employer. Limits the applicability of the criteria established by this Act to questions of employment status arising under the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, self-employment tax provisions, and withholding requirements under the Internal Revenue Code.

Requires recipients of services performed by an independent contractor to file an information return with respect to payments made for such services in excess of $600 for the taxable year. Requires businessmen who make direct sales of consumer goods to individuals for resale on a buy-sell basis or a deposit-commission basis to file information returns for sales in excess of $3,000. Requires individuals who file such information returns to furnish written statements to persons with respect to whom such information is reported which indicate the amount of payment reported. Provides penalties for failure to furnish information returns or statements.

Requires recipients of services performed by an independent contractor to withhold ten percent of the payment made for such services. Sets forth exceptions to such withholding requirement. Provides a penalty for failure to comply with withholding requirements.