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Subject:Re: Tech Writer screening questions) From:"Jeanne A. E. DeVoto" <jaed -at- jaedworks -dot- com> To:"TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com> Date:Sun, 18 Jun 2000 20:35:25 -0700
At 7:30 AM -0700 6/18/2000, Annamaria Profit wrote:
>I've heard lots of other freelance artists say this too. I wonder if
>it's a liability issue. Does incorporation or agency coverage offer a
>more "secure" contact for corporations?
With agencies, it's an issue of protection from the IRS. The IRS (and some
state taxing authorities) has been known to audit companies that hire
independent contractors and declare these contractors "employees" after the
fact, demanding back income-tax withholding (over and above the quarterlies
the contractor may already have paid) as well as penalties and interest.
This has made companies less willing to hire independent contractors, and
many now have policies that don't allow hiring contractors except through
an agency. (The contractor is a W2 employee of the agency - a "leased
employee" rather than a contractor, technically - and so the IRS cannot
come after the client company.)
Incorporating may or may not offer a similar level of protection - I'm not
really clear on this aspect, since it's pretty easy to pierce the corporate
veil shielding a single-person corporation - but a lot of companies believe
it does.
