CM asks
Has anyone been challenged by the IRS or others on the status of "sub-contract" appraisers. I personally know of no apprasial companies who treat their appraisers as employess, including 5 that I used to work for.
Yes, I know two that were challenged, but nearly went bankrupt in the process. The tests in the link Doug presents is a good basis to compare to what those instances were.
In one, the people thought of themselves as employees, kept no records and could not work for anyone else. At years end, one did not have the money to pay his taxes, fessed up to the IRS and Bingo, somebody had to pay.
In the other case, the employer was providing the workers with equipment and autos, and of course, discouraged them from working for anyone else, even themselves....I challenged the owner over the matter because I had came out of the company mentioned above. The owner argued (wrongly) that they were "too small" and the IRS had told them it was OK. But he had about 25 employees instead of the 4 when he last talked to the IRS.
Just because one IRS agent says one thing does not mean the next one reads it that way. Company 2 probably thinks to this day, I am the one who turned them in to the IRS. I quit 2 months before the IRS pounced. They cut no pay checks for 2 months and many hands filed suits, labor claims, etc. until they could dig out from under the mess.
My subs have certifications, work in their own homes, pick and choose their work, accept and hustle other work, and in general, are quite independent of me. Even when I co-sign each has our own copy of the report. They don't work in my office with the rarest of exception.
And Doug, you are right. Real Estate folk are treated differently by IRS fiat. We are not real estate sales people no matter how hard the NAR tries to blur the lines. The only reason we do not see more appraisers caught by the IRS is that we are small 'taters, with too little cash to mess with...the only advantage of poverty.
Terrel Shields
