Aug
30
2010
Independent Contractor Legislation Still Pending
I previously reported on the status of the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408 and S. 2882) introduced in the House and Senate by Rep. Jim McDermott (D-WA, 7th) and Senator John Kerry (D-MA), respectively. The core provisions of these bills make it more difficult for employers to classify workers as independent contractors. Among other things, the proposed legislation would remove an important safe-harbor provision in the U.S. Tax Code, Section 530 of the Revenue Act of 1978, and give the IRS reason to question the independent contractor status of independent financial advisors affiliated with independent broker-dealers.
This legislation is still pending in Congress and may not move forward until the November elections take place. However, the preservation of the independent contractor status of financial advisors remains one of TPA’s top advocacy priorities. The Financial Services Institute (FSI) continues to educate Members of Congress about the proposed legislation’s potential unintended consequences for independent financial advisors and the broker-dealers that serve them. For example, FSI arranged meetings during the August Congressional recess between FSI members and members of key Congressional committees. Additionally, FSI filed an amicus brief in Taylor, et al. v. Waddell & Reed, Inc., et al. FSI‘s brief explains what the independent broker-dealer model is, how independent financial advisors function as independent contractors, and the broker-dealer supervision requirements of federal and state laws, and self-regulatory rules and regulations.
