Originally Posted by StephanieVA
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I did not read through all the posts but doesn't the way DTC works violate the IRS rules regarding Independent Contractor? Sorry if this was addressed, but this is a huge thread.
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I went through an audit by the Bureau of Labor (Oregon's State agency for Department of Labor whose rules are similar to the Federal's rules) and also by the IRS on this during the past year. TDC was not in compliance with the independent contractor rules at that time. TDC changed their "check in" rules with me in order to be somewhat in compliance. Luckily for TDC, I have other clients that proved my independent contractor status. Unfortunately, TDC's agreements, subagreements, and subcontractor guide references imply an employee relationship. The notices of daily reporting or checking in, otherwise you face possible termination if one does not respond by a certain time implies employee relationship and not an independent contractor. Some of the emails on policies I had received from TDC were in violation openly of an independent contractor. The control they insist on is more of an employee relationship. I understand why they need some of the control in order to get their billings done and follow up with a client to make sure they are happy and getting the work done, but there is a better solution in handling it.
Overall, find out the rules and regulations of what an independent contractor is in your state and also be aware of the Fedral rules on this. Make sure you meet those requirements. As an independent contractor, it is your responsibility to know this and don't enter into any agreements that violate that status. If you are in violation, your clients and/or VA staffing agencies will be liable for back taxes (unemployment, social security, state and federal taxes, worker's comp, etc.) and penalty fees. I don't think your clients will want you around if you are going to cost them this extra $$$ and some extensive audits.
Bottom line, you need to be informed and knowledgeable and review every year the requirements of what an independent contractor status is.