Two Jobs, Same Employer

I don't have anything authoritative to cite, but can simply share some observations.

It seems like way back in the day, say 40 years ago, the prevailing theory was that if you were an employee for ANY purpose, you were an employee for EVERY purpose with respect to a particular "employer." So no simultaneous IC status in that case.

But in more recent times, say the past 2 decades, I've seen examples of this. A classic example might be of an attorney who serves as an officer of a corporation and receives a reasonable W-2 salary for those efforts, but also provides independent legal services to the company as an independent contractor. And similarly, the case of a CPA performing independent tax/accounting services, etc.

Some of the key factors in this type of situation might be:

1) The attorney is fully licensed as a practicing attorney and in fact regularly maintains an independent legal practice. 2) The salary received for work as a corporate officer is clearly bona fide and reasonable. 3) The services provided as an independent contractor are NOT rendered "in the ordinary course" of the employer's business. In other words, the corporation in question is not a law practice or anything similar.

Keep in mind, I'm NOT saying these are the "official rules." I'm simply saying these are the circumstances I've observed.

Nominally, it would appear that this framework could be applied to your situation. But what bothers me is the third factor. I assume the corporation in your case is a real estate brokerage, and therefore the services provided as an independent contractor WOULD be in the ordinary course of the employer's business. Maybe the code section that specifically allows realtors to be treated as ICs would cover this situation...or maybe it wouldn't, meaning the code section related to corporate officers would prevail.

Who knows... ;-)

Thanks. I really found nothing authoritative - no cases, no regulations, and even IRS publications were vague or non-committal on this point.

But because this had apparently not been litigated, I figured there was not a big problem out there. I've found that in the real estate business this is fairly common - the managing broker of an office is an employee for that purpose. But when he or she makes a sale, that is typically done as a contractor. Apparently this has not caused any trouble that is obvious to anyone.

I was able to find a letter from the office of IRS chief counsel to a congressman in 2012, that says their approach to this issue is to look at each job separately, and determine the status of each on seprately, on its own merits.

I don't have anything authoritative to cite, but can simply share some observations.

It seems like way back in the day, say 40 years ago, the prevailing theory was that if you were an employee for ANY purpose, you were an employee for EVERY purpose with respect to a particular "employer." So no simultaneous IC status in that case.

But in more recent times, say the past 2 decades, I've seen examples of this. A classic example might be of an attorney who serves as an officer of a corporation and receives a reasonable W-2 salary for those efforts, but also provides independent legal services to the company as an independent contractor. And similarly, the case of a CPA performing independent tax/accounting services, etc.

Some of the key factors in this type of situation might be:

1) The attorney is fully licensed as a practicing attorney and in fact regularly maintains an independent legal practice. 2) The salary received for work as a corporate officer is clearly bona fide and reasonable. 3) The services provided as an independent contractor are NOT rendered "in the ordinary course" of the employer's business. In other words, the corporation in question is not a law practice or anything similar.

Keep in mind, I'm NOT saying these are the "official rules." I'm simply saying these are the circumstances I've observed.

Nominally, it would appear that this framework could be applied to your situation. But what bothers me is the third factor. I assume the corporation in your case is a real estate brokerage, and therefore the services provided as an independent contractor WOULD be in the ordinary course of the employer's business. Maybe the code section that specifically allows realtors to be treated as ICs would cover this situation...or maybe it wouldn't, meaning the code section related to corporate officers would prevail.

Who knows... ;-)

=========I would agree that this is ultimately a facts-and-circumstances case. However, generally i concur: NO.

I have seen the following cases where it was permitted during the same YEAR:

1) A contractor in the first part of the year gets hired later in the year.

2) A former employee (especially if retired and drawing a pension) comes back as an outside contractor, generally for a short duration or one-shot temporary position, where there was a period between the two when the employee/contractor was not attached to the company.

3) If one of the two positions (but not both) has a "Section 530 safe-harbor" to be treated as an outside contractor, but the other doesn't.

The only authoritative thing I could find on this was a letter written from the office of the IRS chief counsel to a member of the House of Representatives on this point. The attorney said that, in this kind of situation, they look at and analyze each function separately to determine the proper status for that job. They use the regular tests for employee vs. independent contractor, and just apply those to each and that's the bottom line.