Discussion:Form 8919 Discussion

I was wondering if the IRS figures that we will start questioning each and every Form 1099-MISC that crosses our desk as to whether the taxpayer was or was not a IC and subject to SE. If the taxpayer indicates that they think they are really and employee, do we then file the 8919. Should we really be making that determination?

This in only my observation on the form 8919, … what say ye all?

The one case were I really wanted something like a 8919 involved a high school kid who was working construction before he went to college. He ended up with a large tax liability.

IRS loses significant revenue due to nonfilers and delinquent accounts, more so than net tax assessment (essentially the deduction from gross income for 1/2 the S/E, net of moving any expense deductions to Sch A). It's the States who lose out, and Form 4137 was not conducive to furnishing meaningful info to them for their enforcement.

But theorize...were IRS to add another Reason Code -- "I am quite certain that I am an employee under the 'duck test.'" It is possible the Treasury could see a revenue gain through self-enforcing compliance which they absolutely love, though IRS is usually too conservative to assure Treasury that this will actually work based on gut feeling.

What IRS would do is add some line items to the form for the key factors, such as briefly describe the nature of your work. Yes or no, as to whether it is performed on the employer premises. State also your estimate of the number of workers in this class. Report also your business expenses other than auto usage, often a phony number for economic profit. Minimal impact re the Paperwork Reduction Act at 44 USC. State tax agencies would surely be pleased under fed-state tax exchange agreements, to better target their enforcement!

Let's not give nobody in gov't any ideas!  :-)

Could the Form 8819 be used in these cases just to pay FICA and so "buy" quarters of contributions for social security? Does the payment get counted by the Social Security Administration?

Actually, SSA does ask IRS to examine reported SS coverage. If wrong, IRS reports back reduced earnings. It may be true today, though, that add'l FICA earnings are not a good investment. There's a calculator applet on ssa.gov to fiddle with scenarios.

I technically meant not to claim the totalization agreement so FICA becomes due, but I take your point that this will probably not meet the new "more likely than not" standard so I will retreat to my dark dreamy corner!

Note that in many cases you CANNOT use this form unless an SS-8 has been filed. What will you charge to complete an SS-8 form for your clients?