The Marketing Research Association appealed to the Senate Finance Committee today to oppose a tax amendment that would threaten independent contractor status protection for respondent-researcher relationships.
The Brown-Rockefeller Amendment #4 (the Fair Playing Field Act) is expected to be offered tomorrow during committee markup of the "Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act." As explained by MRA's letter, "The amendment would effectively repeal Section 530 of the Revenue Act of 1978 (“Section 530”), the safe harbor provision which protects the tax status of independent contractor relationships."
Independent contractors play an essential role in research: "any research respondent receiving an incentive to participate in a study is an independent contractor. Section 530 provides both parties to an independent contractor relationship with absolute certainty that such status will be respected by the Internal Revenue Service (IRS). As long as the income paid an individual is reported on Forms 1099-MISC, the federal government shouldn’t care whether an individual performs services as an employee orindependent contractor. The FICA/SECA tax treatment of each is now substantially the same and their respective tax-compliance rates are more or less the same."
Moreover, regulatory certainty and predictability "for independent contractors inures to the benefit of independent contractors, the research companies that need their participation and the whole nation’s economy (which depends on that research)."
MRA's letter concluded that, "Section 530 is essential to the proper functioning of the research process and we request your assistance in maintaining it."