James Hill: “H.R. 1145 does two things to help those folks that wrote to the gentleman. First, it clarifies this definition of…”

“H.R. 1145 does two things to help those folks that wrote to the gentleman. First, it clarifies this definition of independent contractor because now it is a very confusing thing. Obviously in the case that my colleague has just described, one IRS agent thought they met the conditions; the next agent says that they did not. But I think that one of the other elements that are so important here is the safe harbor provision, so that if people are acting under the assumption that what they are doing based upon previous decisions or previous audits or previous consultations is the appropriate thing, that someone cannot come along later and not only force them to pay the taxes but impose these dreadful penalties on top of it. So, it is very important here that folks understand that what we are trying to do in this bill is to make a clear definition of independent contractor so that it will eliminate the confusion but also in that process eliminate a safe harbor where people can be protected from having these huge penalties that would put them out of business. I make note of the fact that, when you start a business there are two things most important to you. The first is to get customers, to get cash flow, business coming into your business. That is, most businesses fail because they do not get enough customers. The second thing is to generate cash flow.”