Ezel / IRS Rulings / 200929008

CCA discusses worker classification and section 530 relief

Number
200929008
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Not Employees Under Section 530 of 1978 Revenue Act
Topics
Employment taxes
Code sections
§ 3121, § 6110
Ruling dated
June 18, 2009
Publicly released
July 17, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice considers whether a government contractor is subject to section 3121(z) and whether section 530 of the Revenue Act of 1978 applies. The memorandum states that section 530 is relevant only if the matter is a worker-classification dispute, making the taxpayer's treatment of workers as nonemployees or independent contractors central to the issue. It also identifies the three section 530 requirements and notes that the field response focused on reporting consistency and the failure to file Forms 1099.

Ruling snapshot

  • Question: When is section 530 relevant to a worker-classification dispute involving a government contractor?
  • Outcome: Advice given, the memorandum explains the relevance of worker treatment and the issues bearing on section 530 relief.
  • Key authorities: IRC § 3121(z); section 530 of the Revenue Act of 1978; IRC § 6110(k)(3).

Full text (IRS public release)

ID: CCA_2009061810243641 Number: 200929008
Release Date: 7/17/2009
Office: -----------------------------
UILC: 3121.10-00

From: ---------------
Sent: Thursday, June 18, 2009 10:24:40 AM
To: ----------------------
Cc: ---------------------------------------------------------------
Subject: RE: CSP and no 1099s in one year

Is --- a gov't contractor subject to new 3121(z)? The reason I'm asking is b/c -------- has been active in other examinations involving prior years and the same issue. I'm copying her on this email to get her reaction to the scenario below if she was not already aware of it. This may be the same way the others are being handled

530 is only relevant if this is a worker classification dispute; legislative history makes that clear. So the TPs treatment of the workers as nonemployees/ICs is crucial to that issue and the application of CSP. If 530 is relevant here at all, then the question is whether they satisfies the 3 requirements; the field response to that seems to be focusing on the reporting consistency requirement and the failure to file 1099s.

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace