Ezel / IRS Rulings / 200947059

CCA 200947059: Insurance salesperson independent-contractor questions

Number
200947059
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Employees
Topics
Employment taxes
Code sections
§ 3121, § 6110
Publicly released
November 20, 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

This Chief Counsel advice discusses notices concerning whether insurance salespersons are independent contractors. The writer says the substance of the notices appears in the Internal Revenue Manual and notes that Tax Court cases finding insurance salespersons to be independent contractors have not been overturned or negatively described. The writer also observes that the difference in tax may be smaller than a taxpayer expects after self-employment tax and employee benefits are included in the comparison. The advice recommends comparing the facts of any actual case with the agent's facts.

Ruling snapshot

  • Question: What considerations apply when evaluating an insurance salesperson's independent-contractor status?
  • Outcome: Advice given
  • Key authorities: IRC § 3121

Full text (IRS public release)

ID: CCA-181235-09 Number: 200947059
Release Date: 11/20/2009
Office: -----------------------
UILC: 3121.04-00

From: -------------------
Sent: Thursday, January 08, 2009 12:33 PM
To: ------------------
Cc: --------------
Subject: RE: Question re insurance agent ind. Contractor status ----------

I believe the substance of these notices actually made it into the provisions of the IRM . A couple of points, the tax court cases finding insurance salespersons to be independent contractors have not been overturned or negatively described. Second, often once the SECA tax is calculated and employee benefits are included in come the difference in tax is not so great, which is something the taxpayer may not realize until the numbers are crunched. If there is an actual case I suggest you discuss the facts with the agent to ensure the facts are the same as in the cases.

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