Re: IRS regulations in business

Andrea Gallagher (
Mon, 21 Jul 1997 19:05:57 -0700

[Andrea decides to see if there's a useful conversation in this thread,
before Perry explodes upon realizing that this is someone who helps write
"consumer protection" laws for New York.]

Abraham Moses Genen wrote:
>During my service to the US Congress I was involved in drafting and/or
>analyzing several thousand pieces of legislation that effected and
>(hopefully) helped to advance the cause of social evolution.
>Possibly, part of the problem is that almost no one outside of a few
>professionals are aware how much legislation is introduced in the House
>and Senate any given term. Much of what is drafted, amended and passed is
>quite technical and, unfortunately, quite complex and arcane.

I suspect this is true, and that is part of the problem that so many on
this list have with these regulations. Why don't we take the IRS rules
about contractors as one example? You said to Perry that we could
comfortably expect these regulations to adapt to suit organizations as they
change. In fact, the IRS tightened the rules for when you can call someone
a contractor just as many companies have started to use contracting
heavily. I have been asked by firms, for whom I believed I was clearly
contracting, if I would please sign on as a temporary employee just to
avoid IRS issues.

If contract relationships are the wave of the future, why is the IRS making
it so difficult to operate this way? It's relatively easy to explain if
you take a public choice approach and assume that the IRS wants to maximize
it's revenue and power with little regard to the effect on the economy.
How would you interpret the situation?