Ezel / IRS Rulings / 200948060

CCA 200948060: School bus drivers may report income with offsetting deductions

Number
200948060
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Adjusted Gross Income Defined
Topics
Income and deductions
Code sections
§ 62, § 6110
Publicly released
November 27, 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 school bus drivers who were reported on Forms 1099, particularly as nonemployee compensation. The advice states that a driver should report the income, offset by deductions, on Form 1040 for both income-tax and self-employment-tax purposes. It notes that the deductions could eliminate the income and create a benefit beyond what the drivers would receive as employees. The advice also considers whether separate lease agreements could support a dual lessee-lessor relationship between employees and employers, depending on the facts.

Ruling snapshot

  • Question: How should school bus drivers report 1099 compensation, and can a separate lease agreement support a dual relationship with the school district?
  • Outcome: Advice given
  • Key authorities: IRC § 62; Form 1040; Rev. Rul. concerning employee and employer lease arrangements

Full text (IRS public release)

ID: CCA-921123-09 Number: 200948060
Release Date: 11/27/2009
Office: -----------------------------
UILC: 62.00-00

From: ---------------
Sent: Friday, July 17, 2009 7:51 AM
To: ----------------------
Cc: ----------------------------
Subject: Re: school bus drivers/school districts

If they reported on 1099, particularly as nonee comp, driver should have reported income offset by deductions on 1040 for both income/seca purposes. Of course maybe the deductions wipe out the income which gives them a benefit beyond what they would get as EEs. --------------------------------------------
------------------------------------------------------It sounds like they would have some facts for the separate lease agreement and some facts against it b/c they were not as consistent as they should have been. We put out a RR a few years ago saying EE can't lease to ER, but leaves open (by silence) the possibility of dual relationship, ie, that there is a separate lessee-lessor relationship. ----------------------------------------------------
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