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Simultaneous Employment Contracts

A client was offered two job contracts for the same company. The first contract is as a consultant, as an employee, for a specific salary.

The second contract is as a real estate broker, an officer of the employing corporationa, but as an independent contractor.

As I read the law, that would be proper - even though under all other circumstances a real estate broker would be considered an employee, if she fits the three part test in ?3508 (which she does) she can be considered a contractor for federal tax purposes.

Now the employer (which offered this dichotomy in the first place) is having second thoughts about whether the contractor scheme is proper.

Am I missing something?

Thanks.

Reply to
Stuart O. Bronstein
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Regarding "officer of the employing corporation," see IRC 3121(d)(1).

Reply to
MTW

Thanks. And in general I would agree. But ?3508 is a specific statute dealing with real estate licensees. Section 3121 is general and doesn't say it applies to real estate licensees, while it does refer insurance sales people.

Certainly the person is a statutory employee. However under normal rules of statutory interpretation, the specific rules over the general. In this case the specific rule concerning real estate sales people would supercede the non-specific rule about statutory employees.

At least that's the way it seems to me. The only distinction I can think of is that ?3508 talk about real estate "agents" while the person in this case is a broker. So perhaps that's the critical point.

Reply to
Stuart O. Bronstein

I doubt agent vs broker is a critical point in the IRC. Brokers are "agents" of their principals under general legal concepts. Real estate "agents" are licensed to a lower level of activity under state real estate licensing schemes, and they must work under a licensed real estate "broker". I think the IRS is using the term "agent" in the general legal sense, not in the sense of broker vs. agent in state real estate licensing schemes.

Reply to
Taxed and Spent

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