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Tax Blawg

Tax Talk for Tax Pros

Introduction

Welcome to TaxBlawg, a resource for news and analysis of current legal issues facing tax practitioners. Although blawg.com identifies nearly 1,400 active “blawgs,” including 20+ blawgs related to taxation and estate planning, the needs of tax professionals have received surprisingly little attention. The Wall Street Journal's Tax Blog gives “tips and advice for filers,” and Paul Caron’s legendary TaxProf Blog is an excellent clearinghouse for academic and policy-oriented news. Yet, tax practitioners still lack a dedicated resource to call their own. For those intrepid souls, we offer TaxBlawg, a forum of tax talk for tax pros.

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Direct Sellers Hit by IRS Worker - Classification Audits

Despite the recent increase in online commerce, traditional methods of moving product, such as so-called “direct selling,” are alive and well.  Indeed, according to a recent IRS study, direct selling is a significant industry, with annual sales of nearly $30 billion and more than 13 million salespersons in the United States alone.  The IRS has intensified worker-classification audits over the past few years, generally claiming that workers should be treated as employees instead of independent contractors.  Theoretically, these audits should cause little concern for direct sellers because they enjoy a special status under the Internal Revenue Code.  The reality, though, is that the IRS’s recent audits have caused problems for many direct sellers, particularly those who fail to appreciate their unique tax status and/or assert their rights.  The attached article, called “Direct Sellers Hit by IRS Worker-Classification Audits:  An Analysis of the Obscure Rules and Strategies Applicable to These Workers," is designed to alleviate these problems.  The article was published in a recent issue of Taxes – The Tax Magazine.

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    Hale is a partner in the Tax Controversy and Litigation Section and Chair of the International Tax Group. He defends clients and tax audits, tax appeals, and litigation before the Tax Court. Hale's practice focuses on ...