In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for
months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had
everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations,
when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my
substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to
take care of me, and that I would take responsibility for my own future and myself.
Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer... and two years later,
thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other
such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.
For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax
purposes. Visit this link for a conference committee report (
www.synergistech.com...) regarding the intended
interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers
and their clients, read our discussion here (
www.synergistech.com...).
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:
(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person,
provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker
engaged in a similar line of work.
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.
Note:
· "another person" is the client in the traditional job-shop relationship.
· "taxpayer" is the recruiter, broker, agency, or job shop.
· "individual", "employee", or "worker" is you.
Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well
have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared
me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.
During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator,
congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours
on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this
atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the
windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income
that I couldn’t bill clients.
cot'd next post.