In Uncategorized on 01/07/2016 at 20:39

No, this is not about the time 2nd Lieutenant King, all five foot one of him, fresh from ROTC at some Pennsylvania hick school, heel-stomped the barrackroom floor we’d just spent two hours polishing on our hands and knees. Of course I’m not bitter; it was nearly fifty years ago. That’s not to say I wouldn’t seek out his name on a certain wall not far from 400 Second Street, NW, where are graven the names of too many better men.

No, this is the story of the exploration by The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Indefatigable, Ineluctable, Illustrious, and Imperturbable Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes, of The Gig Economy.

See Jorge Quintanilla, 2016 T. C. Memo. 5, filed 1/7/16, at p. 14.

There’s no politico-economic discussion in the opinion, and, this being a non-political blog, there won’t be any here.

Jorge works at various arcane technical posts in the movie business, but it’s not The Force Awakens kind of stuff; rather, Jorge works designing, building and dealing with sets and props for TV commercials. And he does well, even though most of his viewers doubtless hit the “mute” button and head for the bathroom as soon as the epic in which Jorge figures hits the small screen.

Jorge is a true freelancer IC, flitting from job to job, turning off the phone when he wants a vacation, hauling two forty-foot toolboxes crammed with four-figure sanders and power tools in his own truck, working from producers’ sketches or just building what he thought would work. And though he joined a union, he got no jobs from the union call board, nor did he get vacation pay or sick pay; and he could cut his own deal for payment. He did get health insurance, and that’s why he joined.

Judge Holmes checks out the facts and factors in the EE-IC scrimmage, and Jorge, pro se, defeats five (count ‘em, five) lawyers for IRS.

“So what?” you’ll say. “My clients aren’t Hollywood set-builders, gaffers, or best boys. This is another fact-driven case. YMMV.”

Yes, but, dear reader, those who operate with gig economy workers also outsource their payroll and HR functions. There were recently a bunch of ads in the dear old NYC subways that I ride every day, claiming to take all that tedious back-office stuff off the entrepreneurs’ cluttered desks. And some of these outsourcerers cut payroll checks on their accounts and issue W-2s to the out-ensourcelled, because the decision between 1099-MISC non-employee compensation and W-2 salary-and-wages is above their pay grades.

IRS thought Jorge was an EE playing the IC game, and nailed him. It looked good until they got to trial.

So the takeaway, patient reader, is that your client who hands you some W-2s but claims he works freelance may be telling the truth. Just check out the websites of the parties who issued those W-2s. The issuers may be issuing for dozens of outfits and issuing one W-2.

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