§7436 Proceedings for Determination of Employment Status

Summary

Allows a person to ask the Tax Court to decide if the IRS was right when it says someone who works for them is an employee or is not eligible for the special treatment under section 530(a) of the Revenue Act of 1978. Only the person for whom the services are done can file. The case must be started within 91 days after the IRS sends the determination by certified or registered mail. If the worker’s tax treatment is changed to “employee” while the case is pending, the court cannot use that change against the filer. The Tax Court’s decision in these cases counts like any other Tax Court decision and can be reviewed like one. If the disputed employment taxes are $50,000 or less for each calendar quarter, the filer can choose a simpler small-case procedure if the Tax Court agrees before the hearing. Small-case decisions cannot be reviewed by other courts and do not set precedent for other taxpayers. Rules that limit assessment and collection, and rules about paying costs and certain fees, apply to these cases as if the IRS had issued a notice of deficiency. Employment tax means any tax under subtitle C.