1.This Act may be cited as the
Taxpayer Responsibility,
Accountability, and Consistency Act of 2009
.
2.Expansion of
information reporting requirements
(a)Section 6041 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsections:
(h)Application to
corporationsNotwithstanding any regulation prescribed by the
Secretary before the date of the enactment of this subsection, for purposes of
this section the term person includes any corporation that is not
an organization exempt from tax under section 501(a).
(i)The
Secretary may prescribe such regulations and other guidance as may be
appropriate or necessary to carry out the purposes of this section, including
rules to prevent duplicative reporting of
transactions.
.
(b)Payments for
property and other gross proceedsSubsection (a) of section 6041
of the Internal Revenue Code of 1986 is amended—
(1)by inserting
amounts in consideration for property,
after
wages,
,
(2)by inserting
gross proceeds,
after emoluments, or other
,
and
(3)by inserting
gross proceeds,
after setting forth the amount of
such
.
(c)The amendments made by this section shall apply to payments
made after December 31, 2011.
3.Determination of
eligibility for safe harbor treatment of individuals as non-employees for
purposes of employment taxes
(a)Chapter 25 of the Internal Revenue Code of 1986 (relating
to general provisions relating to employment taxes) is amended by adding at the
end the following new section:
3511.
(a)Termination of
certain employment tax liability
(1)If—
(A)for purposes of
employment taxes, the taxpayer did not treat an individual as an employee for
any period, and
(B)in the case of
periods after December 31, 1978, all Federal tax returns (including information
returns) required to be filed by the taxpayer with respect to such individual
for such period are filed on a basis consistent with the taxpayer’s treatment
of such individual as not being an employee,
then, for
purposes of applying such taxes for such period with respect to the taxpayer,
the individual shall be deemed not to be an employee unless the taxpayer had no
reasonable basis for not treating such individual as an employee. This
paragraph shall not apply with respect to an individual for any periods
beginning after the date of notice of a determination that such individual
should be treated as an employee of the taxpayer.(2)Statutory
standards for satisfying the requirements of paragraph (1)For
purposes of paragraph (1), a taxpayer shall be treated as having a reasonable
basis for not treating an individual as an employee only if—
(A)the taxpayer’s
treatment of such individual was in reasonable reliance on—
(i)a written determination issued to the
taxpayer addressing the employment status of such individual or another
individual holding a substantially similar position with the taxpayer,
or
(ii)a concluded
examination (for employment tax purposes) of whether such individual (or
another individual holding a substantially similar position) should be treated
as an employee of the taxpayer, with respect to which there was no
determination that such individual (or another individual holding a
substantially similar position) should be treated as an employee, and
(B)the taxpayer (or a predecessor) has not
treated any other individual holding a substantially similar position as an
employee for purposes of employment taxes for any period beginning after
December 31, 1977.
(b)For
purposes of this section—
(1)The term employment tax means any tax imposed by
this subtitle.
(2)The term employment status means the status
of an individual, under the usual common law rules applicable in determining
the employer-employee relationship, as an employee or as an independent
contractor (or other individual who is not an employee).
(c)Special rules
for application of section
(1)Notice of
availability of sectionAn officer or employee of the Internal
Revenue Service shall, before or at the commencement of any examination
relating to the employment status of one or more individuals who perform
services for the taxpayer, provide the taxpayer with a written notice of the
provisions of this section.
(2)Rules relating
to statutory standardsFor
purposes of subsection (a)(2), with respect to any period beginning after the
date of the enactment of this paragraph, a taxpayer may not rely on an
examination commenced, or a written determination issued, if—
(A)the controlling
facts and circumstances that formed the basis of a determination of employment
status have changed or were misrepresented by the taxpayer, or
(B)the Secretary subsequently issues contrary
guidance relating to the determination of employment status that has bearing on
the facts and circumstances that formed the basis of a determination of
employment status.
(3)Substantially
similar positionFor purposes of this section, the determination
as to whether an individual holds a position substantially similar to a
position held by another individual shall be made by the Secretary in a manner
consistent with the Fair Labor Standards Act of 1938.
(d)A taxpayer must establish entitlement to relief under this
section by a preponderance of the evidence.
(e)Petitions for
review of status
(1)Under procedures established by the Secretary not later
than 1 year after the date of the enactment of this section, any individual who
performs services for a taxpayer may petition (either personally or through a
designated representative or attorney) for a determination of the individual’s
status for employment tax purposes.
(2)Administrative
proceduresThe procedures established under paragraph (1) shall
provide for—
(A)a determination of
status not later than 90 days after the filing of the petition with respect to
employment in any industry (such as the construction industry) in which
employment is transient, casual, or seasonal, and
(B)an administrative
appeal of any determination that an individual is not an employee of the
taxpayer.
(3)Duty to seek
service provider informationIn the case of a request by a
taxpayer for a determination of an individual’s status for employment tax
purposes, the Secretary shall, to the extent practicable—
(A)seek to obtain
from such individual information relating to the individual’s performance of
services for the taxpayer, and
(B)provide written
notice to the individual detailing any written determination of the
individual’s status for employment tax purposes.
(f)Results of
misclassification determinationsIn any case in which the
Secretary determines that a taxpayer has misclassified an individual as not an
employee for employment tax purposes, the Secretary shall inform the Secretary
of Labor about such misclassification and notify the individual of any
eligibility for the refund of self-employment taxes under chapter 2.
(g)The Secretary shall, not later than 1 year
after the date of the enactment of this section, prescribe such regulations as
may be necessary and appropriate to carry out the purposes of this
section.
.
(b)
(1)Paragraph (2) of
section 7436(a) of such Code is amendment by striking section 530 of the
Revenue Act of 1978
and inserting section 3511
.
(2)The table of
sections for chapter 25 of such Code is amended by adding at the end the
following new item:
Sec. 3511. Safe
harbor.
.
(c)Termination of
section 530 of the Revenue Act of 1978Section 530 of the Revenue
Act of 1978 shall not apply to services rendered more than 1 year after the
date of the enactment of this Act.
(d)The amendments made by
this section shall apply to services rendered more than 1 year after the date
of the enactment of this Act.
4.Annual reports on
worker misclassificationThe
Secretary of the Treasury shall issue an annual report on worker
misclassification. Such report shall include the following:
(1)Information on the
number and type of enforcement actions against, and examinations of, employers
who have misclassified workers.
(2)Relief obtained as
a result of such actions against, and examinations of, employers who have
misclassified workers.
(3)An overall
estimate of the number of employers misclassifying workers, the number of
workers affected, and the industries involved.
(4)The impact of such
misclassification on the Federal tax system.
(5)Information on the outcomes of the
petitions filed under section 3511(e) of the Internal Revenue Code of
1986.
5.Increase in
information return penalties
(a)Failure To file
correct information returns
(1)Section 6721(a)(1) of the Internal Revenue Code of 1986
is amended—
(A)by striking
$50
and inserting $250
, and
(B)by striking
$250,000
and inserting $3,000,000
.
(2)Reduction where
correction in specified period
(A)Correction
within 30 daysSection 6721(b)(1) of such Code is amended—
(i)by
striking $15
and inserting $50
,
(ii)by
striking $50
and inserting $250
, and
(iii)by
striking $75,000
and inserting $500,000
.
(B)Failures
corrected on or before August 1Section 6721(b)(2) of such Code
is amended—
(i)by
striking $30
and inserting $100
,
(ii)by
striking $50
and inserting $250
, and
(iii)by
striking $150,000
and inserting
$1,500,000
.
(3)Lower limitation
for persons with gross receipts of not more than
$5,000,000Section 6721(d)(1) of such Code is amended—
(A)in subparagraph
(A)—
(i)by
striking $100,000
and inserting $1,000,000
,
and
(ii)by
striking $250,000
and inserting
$3,000,000
,
(B)in subparagraph
(B)—
(i)by
striking $25,000
and inserting $175,000
,
and
(ii)by
striking $75,000
and inserting $500,000
,
and
(C)in subparagraph
(C)—
(i)by
striking $50,000
and inserting $500,000
,
and
(ii)by
striking $150,000
and inserting
$1,500,000
.
(4)Penalty in case
of intentional disregardSection 6721(e) of such Code is
amended—
(A)by striking
$100
in paragraph (2) and inserting $500
,
and
(B)by striking
$250,000
in paragraph (3)(A) and inserting
$3,000,000
.
(b)Failure To
furnish correct payee statements
(1)Section 6722(a) of such Code is amended—
(A)by striking
$50
and inserting $250
, and
(B)by striking
$100,000
and inserting $1,000,000
.
(2)Penalty in case
of intentional disregardSection 6722(c) of such Code is
amended—
(A)by striking
$100
in paragraph (1) and inserting $500
,
and
(B)by striking
$100,000
in paragraph (2)(A) and inserting
$1,000,000
.
(c)Failure To
comply with other information reporting requirementsSection 6723
of such Code is amended—
(1)by striking
$50
and inserting $250
, and
(2)by striking
$100,000
and inserting $1,000,000
.
(d)The amendments made by this section shall apply with respect
to information returns required to be filed after December 31, 2009.