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Senate Bill Seeks Weakening of Section 530 Protection

Sen. John Kerry (D-Mass.) introduced legislation on Dec. 15 that, if enacted, would substantially limit the safe harbor protection of Section 530 against Internal Revenue Service (IRS) reclassification of independent contractors. The Kerry bill follows a July 2009 House proposal (H.R. 3408) that would similarly weaken the protections offered by Section 530. Both bills would eliminate the “industry practice” safe harbor and would allow the IRS much greater latitude in pursuing classification changes. Similar bills aimed at restricting Section 530 relief were proposed in the 110th Congress, but were never actively considered. Unfortunately, greater labor influence in the current Congress makes these proposals a more serious threat. ATA is working with the Coalition to Preserve Independent Contractor Status and other industry groups that utilize independent contractor services to vigorously oppose this legislation.

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