[Congressional Record Volume 160, Number 61 (Monday, April 28, 2014)]
[Extensions of Remarks]
[Page E595]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     FAIR PLAYING FIELD ACT OF 2014

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                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                         Monday, April 28, 2014

  Mr. McDERMOTT. Mr. Speaker, I rise today to introduce the Fair 
Playing Field Act of 2014. In 1978, Congress was concerned that lack of 
clarity as to the proper classification of some workers, increased IRS 
enforcement activity, and retroactive application by IRS of 
interpretations that were arguably new had caused hardships for some 
small businesses and other taxpayers and confusion as to the applicable 
rules.
  To allow time to develop a comprehensive approach to the problem, 
Congress enacted section 530 of the Revenue Act of 1978 as an interim 
measure protecting taxpayers from liability for misclassification if 
the taxpayer has a reasonable basis for classifying a worker as an 
independent contractor and meets certain other conditions. In addition, 
the Act prohibited the Secretary of the Treasury from publishing 
regulations or revenue rulings on workers' employment tax status 
pending the expected near-term enactment of clarifying legislation.
  During the ensuing 33 years, Congress made section 530 of the Revenue 
Act of 1978 permanent, however, changes in working relationships and 
the continued prohibition on new guidance have increased the 
uncertainty as to the proper classification of workers.
  Many workers are properly classified as independent contractors. In 
other instances, workers who are employees are being treated as 
independent contractors. Such misclassification for tax purposes 
contributes to inequities in the competitive positions of businesses 
and to the Federal and State tax gap, and may also result in 
misclassification for other purposes, such as denial of unemployment 
benefits, workplace health and safety protections, and retirement or 
other benefits or protections available to employees.
  Workers, businesses, and other taxpayers will benefit from clear 
guidance regarding employment tax status. In the interest of fairness 
and in view of many service recipients' reliance on current section 
530, such guidance should apply only prospectively.

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