Why did the IRS issue the payroll tax Audit Guidelines?
In Section 530 of the Revenue Act of 1978, Congress prohibited the IRS from issuing additional revenue rulings or regulations on worker classification issues. [Section 530(b), Revenue Act of 1978.] Rev. Rul. 87-41, was exempt because it merely published factors already being used. However, since the issuance of Rev. Rul. 87-41, additional court decisions have dealt with worker classification, adding factors not considered in prior IRS guidance. [Q 2:9.] Moreover, changes have taken place in the business climate which affect the application of the Twenty Factor Test. For example, in the 1990s it became common for employees to have some flexibility in choosing the hours in which they work. This change in the business world reduced the significance of such flexibility to show independent contractor status. The Audit Guidelines also note that, several years ago, a requirement that a worker wear a particular uniform or drive a truck with a particular logo was evidence that the worker was an
