II 

116TH CONGRESS 

1ST SESSION S. 700 

To amend the Internal Revenue Code of 1986 to provide a safe harbor 

for determinations of worker classification, to require increased reporting, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2019 

Mr. THUNE introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a safe harbor for determinations of worker classification, 

to require increased reporting, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘New Economy Works 

5 to Guarantee Independence and Growth Act of 2019’’ or 

6 the ‘‘NEW GIG Act of 2019’’. 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•S 700 IS

1 SEC. 2. DETERMINATION OF WORKER CLASSIFICATION. 

2 (a) IN GENERAL.—Chapter 79 of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new section: 

5 ‘‘SEC. 7706. DETERMINATION OF WORKER CLASSIFICATION. 

6 ‘‘(a) IN GENERAL.—For purposes of this title (and 

7 notwithstanding any provision of this title not contained 

8 in this section to the contrary), if the requirements of sub9 sections (b), (c), and (d) are met with respect to any serv10 ice performed by a service provider, then with respect to 

11 such service— 

12 ‘‘(1) the service provider shall not be treated as 

13 an employee, 

14 ‘‘(2) the service recipient shall not be treated as 

15 an employer, 

16 ‘‘(3) any payor shall not be treated as an em17 ployer, and 

18 ‘‘(4) the compensation paid or received for such 

19 service shall not be treated as paid or received with 

20 respect to employment. 

21 ‘‘(b) GENERAL SERVICE PROVIDER REQUIRE22 MENTS.— 

23 ‘‘(1) IN GENERAL.—The requirements of this 

24 subsection are met with respect to any service if the 

25 service provider either— 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•S 700 IS

1 ‘‘(A) meets the requirements of paragraph 

2 (2) with respect to such service, or 

3 ‘‘(B) in the case of a service provider en4 gaged in the trade or business of selling (or so5 liciting the sale of) goods or services, meets the 

6 requirements of paragraph (3) with respect to 

7 such service. 

8 ‘‘(2) GENERAL REQUIREMENTS.— 

9 ‘‘(A) IN GENERAL.—The requirements of 

10 this paragraph are met with respect to any 

11 service if the service provider, in connection 

12 with performing the service— 

13 ‘‘(i) incurs expenses— 

14 ‘‘(I) which are deductible under 

15 section 162, and 

16 ‘‘(II) a significant portion of 

17 which are not reimbursed, 

18 ‘‘(ii) agrees to perform the service for 

19 a particular amount of time, to achieve a 

20 specific result, or to complete a specific 

21 task, and 

22 ‘‘(iii) satisfies not less than one of the 

23 factors described in subparagraph (B). 

24 ‘‘(B) FACTORS.—The factors described in 

25 this subparagraph are the following: 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•S 700 IS

1 ‘‘(i) The service provider has a signifi2 cant investment in assets or training which 

3 are applicable to the service performed. 

4 ‘‘(ii) The service provider is not re5 quired to perform services exclusively for 

6 the service recipient or payor. 

7 ‘‘(iii) The service provider has not 

8 been treated as an employee by the service 

9 recipient or payor for substantially the 

10 same services during the 1-year period 

11 ending with the date of the commencement 

12 of services under the contract described in 

13 subsection (d). 

14 ‘‘(iv) The service provider is not com15 pensated on a basis which is tied primarily 

16 to the number of hours actually worked. 

17 ‘‘(3) ALTERNATIVE REQUIREMENTS WITH RE18 SPECT TO SALES PERSONS.—In the case of a service 

19 provider engaged in the trade or business of selling 

20 (or soliciting the sale of) goods or services, the re21 quirements of this paragraph are met with respect 

22 to any service provided in the ordinary course of 

23 such trade or business if— 

24 ‘‘(A) the service provider is compensated 

25 primarily on a commission basis, and 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•S 700 IS

1 ‘‘(B) substantially all the compensation for 

2 such service is directly related to sales of goods 

3 or services rather than to the number of hours 

4 worked. 

5 ‘‘(c) PLACE OF BUSINESS OR OWN EQUIPMENT RE6 QUIREMENT.—The requirement of this subsection is met 

7 with respect to any service if the service provider— 

8 ‘‘(1) has a principal place of business, 

9 ‘‘(2) does not provide the service primarily in 

10 the service recipient’s place of business, 

11 ‘‘(3) pays a fair market rent for use of the serv12 ice recipient’s or payor’s place of business, or 

13 ‘‘(4) provides the service primarily using equip14 ment supplied by the service provider. 

15 ‘‘(d) WRITTEN CONTRACT REQUIREMENT.—The re16 quirements of this subsection are met with respect to any 

17 service if such service is performed pursuant to a written 

18 contract between the service provider and the service re19 cipient or payor, whichever is applicable, which meets the 

20 following requirements: 

21 ‘‘(1) The contract includes each of the fol22 lowing: 

23 ‘‘(A) The service provider’s name, taxpayer 

24 identification number, and address. 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•S 700 IS

1 ‘‘(B) A statement that the service provider 

2 will not be treated as an employee with respect 

3 to the services provided pursuant to the con4 tract for purposes of this title. 

5 ‘‘(C) A statement that the service recipient 

6 or payor will withhold upon and report to the 

7 Internal Revenue Service the compensation pay8 able pursuant to the contract consistent with 

9 the requirements of this title. 

10 ‘‘(D) A statement that the service provider 

11 is responsible for payment of Federal, State, 

12 and local taxes, including self-employment 

13 taxes, on compensation payable pursuant to the 

14 contract. 

15 ‘‘(E) A statement that the contract is in16 tended to be considered a contract described in 

17 this subsection. 

18 The contract shall not fail to meet the requirements 

19 of this paragraph merely because the information 

20 described in subparagraph (A) is collected at the 

21 time payment is made for the services and not in ad22 vance, or because the contract provides that an 

23 agent of the service recipient or payor will fulfill any 

24 of the responsibilities of the service recipient or 

25 payor described in the preceding subparagraphs. 


pamtmann on DSKBFK8HB2PROD with BILLS
7 

•S 700 IS

1 ‘‘(2) The term of the contract does not exceed 

2 2 years. The preceding sentence shall not prevent 

3 one or more subsequent written renewals of the con4 tract from satisfying the requirements of this sub5 section if the term of each such renewal does not ex6 ceed 2 years and if the information required under 

7 paragraph (1)(A) is updated in connection with each 

8 such renewal. 

9 ‘‘(3) The contract (or renewal) is signed (which 

10 may include signatures in electronic form) by the 

11 service recipient or payor and the service provider 

12 not later than the date on which the aggregate pay13 ments made by the service recipient or payor to the 

14 service provider exceeds $1,000 for the year covered 

15 by the contract (or renewal). 

16 ‘‘(e) REPORTING REQUIREMENTS.— 

17 ‘‘(1) IN GENERAL.—For purposes of making 

18 any determination with respect to the liability of a 

19 service recipient or payor for any tax during any 

20 taxable year with respect to a service provider, the 

21 application of this section shall be conditioned on ei22 ther the service recipient or the payor satisfying the 

23 reporting requirements applicable to such service re24 cipient or payor under section 6041(a), 6041A(a), or 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•S 700 IS

1 6050W with respect to such service provider for 

2 such period. 

3 ‘‘(2) REASONABLE CAUSE.—For purposes of 

4 paragraph (1), such reporting requirements shall be 

5 treated as met if the failure to satisfy such require6 ments is due to reasonable cause and not willful ne7 glect. 

8 ‘‘(f) EXCEPTION FOR SERVICES PROVIDED BY

9 OWNER.—This section shall not apply with respect to any 

10 service provided by a service provider to a service recipient 

11 or payor if the service provider owns any interest in the 

12 service recipient or the payor with respect to the service 

13 provided. The preceding sentence shall not apply in the 

14 case of a service recipient or payor the stock of which is 

15 regularly traded on an established securities market. 

16 ‘‘(g) LIMITATION ON RECLASSIFICATION BY SEC17 RETARY.—For purposes of this title— 

18 ‘‘(1) EFFECT OF RECLASSIFICATION ON SERV19 ICE RECIPIENTS AND PAYORS.—A determination by 

20 the Secretary that a service recipient or a payor 

21 should have treated a service provider as an em22 ployee shall be effective with respect to the service 

23 recipient or payor no earlier than the notice date 

24 if— 


pamtmann on DSKBFK8HB2PROD with BILLS
9 

•S 700 IS

1 ‘‘(A) the service recipient or the payor en2 tered into a written contract with the service 

3 provider which meets the requirements of sub4 section (d), 

5 ‘‘(B) the service recipient or the payor sat6 isfied the applicable reporting requirements of 

7 section 6041(a), 6041A(a), or 6050W for all 

8 relevant taxable years with respect to the serv9 ice provider, 

10 ‘‘(C) the service recipient or the payor col11 lected and paid over all applicable taxes im12 posed under subtitle C for all relevant taxable 

13 years with respect to the service provider, and 

14 ‘‘(D) the service recipient or the payor 

15 demonstrates a reasonable basis for having de16 termined that the service provider should not be 

17 treated as an employee under this section and 

18 that such determination was made in good 

19 faith. 

20 ‘‘(2) EFFECT OF RECLASSIFICATION ON SERV21 ICE PROVIDERS.—A determination by the Secretary 

22 that a service provider should have been treated as 

23 an employee shall be effective with respect to the 

24 service provider no earlier than the notice date if— 


pamtmann on DSKBFK8HB2PROD with BILLS
10 

•S 700 IS

1 ‘‘(A) the service provider entered into a 

2 written contract with the service recipient or 

3 the payor which meets the requirements of sub4 section (d), 

5 ‘‘(B) the service provider satisfied the ap6 plicable reporting requirements of sections 

7 6012(a) and 6017 for all relevant taxable years 

8 with respect to the service recipient or the 

9 payor, and 

10 ‘‘(C) the service provider demonstrates a 

11 reasonable basis for determining that the serv12 ice provider is not an employee under this sec13 tion and that such determination was made in 

14 good faith. 

15 ‘‘(3) NOTICE DATE.—For purposes of this sub16 section, the term ‘notice date’ means the 30th day 

17 after the earliest of— 

18 ‘‘(A) the date on which the first letter of 

19 proposed deficiency which allows the service 

20 provider, the service recipient, or the payor an 

21 opportunity for administrative review in the In22 ternal Revenue Service Office of Appeals is 

23 sent, 

24 ‘‘(B) the date on which a deficiency notice 

25 under section 6212 is sent, or 


pamtmann on DSKBFK8HB2PROD with BILLS
11 

•S 700 IS

1 ‘‘(C) the date on which a notice of deter2 mination under section 7436(b)(2) is sent. 

3 ‘‘(4) REASONABLE CAUSE EXCEPTION.—The re4 quirements of paragraphs (1)(B), (1)(C), and (2)(B) 

5 shall be treated as met if the failure to satisfy such 

6 requirements is due to reasonable cause and not 

7 willful neglect. 

8 ‘‘(5) NO RESTRICTION ON ADMINISTRATIVE OR

9 JUDICIAL REVIEW.—Nothing in this subsection shall 

10 be construed as limiting any provision of law which 

11 provides an opportunity for administrative or judi12 cial review of a determination by the Secretary. 

13 ‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec14 tion shall be construed as— 

15 ‘‘(1) limiting the ability or right of a service 

16 provider, service recipient, or payor to apply any 

17 other provision of this title, section 530 of the Rev18 enue Act of 1978, or any common law rules for de19 termining whether an individual is an employee, or 

20 ‘‘(2) establishing a prerequisite for the applica21 tion of any provision of law described in paragraph 

22 (1). 

23 ‘‘(i) DEFINITIONS.—For purposes of this section— 

24 ‘‘(1) SERVICE PROVIDER.— 


pamtmann on DSKBFK8HB2PROD with BILLS
12 

•S 700 IS

1 ‘‘(A) IN GENERAL.—The term ‘service pro2 vider’ means any qualified person who performs 

3 service for another person. 

4 ‘‘(B) QUALIFIED PERSON.—The term 

5 ‘qualified person’ means— 

6 ‘‘(i) any natural person, or 

7 ‘‘(ii) any entity if any of the services 

8 referred to in subparagraph (A) are per9 formed by one or more natural persons 

10 who directly own interests in such entity. 

11 ‘‘(2) SERVICE RECIPIENT.—The term ‘service 

12 recipient’ means the person for whom the service 

13 provider performs such service. 

14 ‘‘(3) PAYOR.—The term ‘payor’ means— 

15 ‘‘(A) any person, including the service re16 cipient, who pays the service provider for per17 forming such service, or 

18 ‘‘(B) any marketplace platform, as defined 

19 in section 6050W(d)(3)(C). 

20 ‘‘(j) REGULATIONS.—Notwithstanding section 530(d) 

21 of the Revenue Act of 1978, the Secretary shall issue such 

22 regulations as the Secretary determines are necessary to 

23 carry out the purposes of this section.’’. 

24 (b) VOLUNTARY WITHHOLDING AGREEMENTS AND

25 WORKER CLASSIFICATION.—Section 3402(p) of the InterVerDate Sep 11 2014 21:29 Mar 22, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S700.IS S700

pamtmann on DSKBFK8HB2PROD with BILLS
13 

•S 700 IS

1 nal Revenue Code of 1986 is amended by adding at the 

2 end the following new paragraph: 

3 ‘‘(4) WORKER CLASSIFICATION.—Agreements 

4 under paragraph (3) shall not be taken into account 

5 in determining whether any party to such agreement 

6 is an employee or an employer for purposes of this 

7 title.’’. 

8 (c) WITHHOLDING BY PAYOR IN CASE OF CERTAIN

9 PERSONS CLASSIFIED AS NOT EMPLOYEES.—Section 

10 3402 of the Internal Revenue Code of 1986 is amended 

11 by adding at the end the following new subsection: 

12 ‘‘(u) EXTENSION OF WITHHOLDING TO PAYMENTS

13 TO CERTAIN PERSONS CLASSIFIED AS NOT EMPLOY14 EES.— 

15 ‘‘(1) IN GENERAL.—For purposes of this chap16 ter and so much of subtitle F as relates to this chap17 ter, compensation paid pursuant to a contract de18 scribed in section 7706(d) shall be treated as if it 

19 were a payment of wages by an employer to an em20 ployee. 

21 ‘‘(2) AMOUNT WITHHELD.—Except as otherwise 

22 provided under subsection (i), the amount to be de23 ducted and withheld pursuant to paragraph (1) with 

24 respect to compensation paid pursuant to any such 

25 contract during any calendar year shall be an 


pamtmann on DSKBFK8HB2PROD with BILLS
14 

•S 700 IS

1 amount equal to 5 percent of so much of the amount 

2 of such compensation as does not exceed $20,000.’’. 

3 (d) DIRECT SELLERS OF PROMOTIONAL PROD4 UCTS.—Subsection (b) of section 3508 of the Internal 

5 Revenue Code of 1986 is amended— 

6 (1) in paragraph (2)(A)— 

7 (A) in clause (ii), by striking ‘‘or’’ at the 

8 end; 

9 (B) in clause (iii), by adding ‘‘or’’ at the 

10 end; and 

11 (C) by inserting after clause (iii) the fol12 lowing new clause: 

13 ‘‘(iv) is engaged in the trade or busi14 ness of selling, or soliciting the sale of, 

15 promotional products from other than a 

16 permanent retail establishment,’’; 

17 (2) by redesignating paragraph (3) as para18 graph (4); and 

19 (3) by inserting after paragraph (2) the fol20 lowing new paragraph: 

21 ‘‘(3) PROMOTIONAL PRODUCT.—For purposes 

22 of paragraph (2)(A)(iv), the term ‘promotional prod23 uct’ means a tangible item with permanently marked 

24 promotional words, symbols, or art of the pur25 chaser.’’. 


pamtmann on DSKBFK8HB2PROD with BILLS
15 

•S 700 IS

1 (e) REPORTING.— 

2 (1) INFORMATION AT SOURCE.—Section 6041 

3 of the Internal Revenue Code of 1986 is amended— 

4 (A) in subsection (a)— 

5 (i) in the heading, by striking ‘‘$600’’ 

6 and inserting ‘‘$1,000’’; and 

7 (ii) by striking ‘‘$600 or more in any 

8 taxable year’’ and inserting ‘‘$1,000 or 

9 more in any taxable year’’; and 

10 (B) by adding at the end the following new 

11 subsection: 

12 ‘‘(h) SPECIAL RULES FOR CERTAIN PERSONS CLAS13 SIFIED AS NOT EMPLOYEES.— 

14 ‘‘(1) IN GENERAL.—In the case of any service 

15 recipient or payor required to make a return under 

16 subsection (a) with respect to compensation to which 

17 section 7706(a) applies— 

18 ‘‘(A) such return shall include— 

19 ‘‘(i) the aggregate amount of such 

20 compensation paid to each person whose 

21 name is required to be included on such re22 turn, 

23 ‘‘(ii) the aggregate amount deducted 

24 and withheld under section 3402(s) with 

25 respect to such compensation, and 


pamtmann on DSKBFK8HB2PROD with BILLS
16 

•S 700 IS

1 ‘‘(iii) an indication of whether a copy 

2 of the contract described in section 

3 7706(d) is on file with the service recipient 

4 or payor, and 

5 ‘‘(B) the statement required to be fur6 nished under subsection (d) shall include the in7 formation described in subparagraph (A) with 

8 respect to the service provider to whom such 

9 statement is furnished. 

10 ‘‘(2) DEFINITIONS.—Terms used in this sub11 section which are also used in section 7706 shall 

12 have the same meaning as when used in such sec13 tion.’’. 

14 (2) RETURNS REGARDING PAYMENTS OF REMU15 NERATION FOR SERVICES AND DIRECT SALES.—Sec16 tion 6041A of such Code is amended— 

17 (A) in paragraph (2) of subsection (a), by 

18 striking ‘‘$600’’ and inserting ‘‘$1,000’’; and 

19 (B) by adding at the end the following new 

20 subsection: 

21 ‘‘(g) SPECIAL RULES FOR CERTAIN PERSONS CLAS22 SIFIED AS NOT EMPLOYEES.—Rules similar to the rules 

23 of subsection (h) of section 6041 shall apply for purposes 

24 of this section.’’. 


pamtmann on DSKBFK8HB2PROD with BILLS
17 

•S 700 IS

1 (3) RETURNS RELATING TO PAYMENTS MADE

2 IN SETTLEMENT OF PAYMENT CARD AND THIRD

3 PARTY NETWORK TRANSACTIONS.—Section 6050W 

4 of such Code is amended— 

5 (A) in subsection (d), by amending para6 graph (3) to read as follows: 

7 ‘‘(3) THIRD PARTY PAYMENT NETWORK.— 

8 ‘‘(A) IN GENERAL.—The term ‘third party 

9 payment network’ means any agreement or ar10 rangement— 

11 ‘‘(i) which involves the establishment 

12 of accounts with a central organization or 

13 marketplace platform by a substantial 

14 number of persons who— 

15 ‘‘(I) are unrelated to such organi16 zation or platform, 

17 ‘‘(II) provide goods or services, 

18 and 

19 ‘‘(III) have agreed to settle 

20 transactions for the provision of such 

21 goods or services pursuant to such 

22 agreement or arrangement, 

23 ‘‘(ii) which provides for standards and 

24 mechanisms for settling such transactions, 

25 and 


pamtmann on DSKBFK8HB2PROD with BILLS
18 

•S 700 IS

1 ‘‘(iii) which guarantees persons pro2 viding goods or services pursuant to such 

3 agreement or arrangement that such per4 sons will be paid for providing such goods 

5 or services. 

6 ‘‘(B) EXCEPTION.—The term ‘third party 

7 payment network’ shall not include any agree8 ment or arrangement which provides for the 

9 issuance of payment cards. 

10 ‘‘(C) MARKETPLACE PLATFORM.—For pur11 poses of subparagraph (A), the term ‘market12 place platform’ means any person who— 

13 ‘‘(i) operates a digital website, mobile 

14 application, or similar system that facili15 tates the provision of goods or services by 

16 providers to recipients, 

17 ‘‘(ii) enters into an agreement with 

18 each provider stating that such provider 

19 will not be treated as an employee with re20 spect to such goods or services, 

21 ‘‘(iii) provides standards and mecha22 nisms for settling such facilitated trans23 actions, and 

24 ‘‘(iv) guarantees each provider of 

25 goods or services pursuant to such agreeVerDate Sep 11 2014 21:29 Mar 22, 2019 Jkt 089200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S700.IS S700

pamtmann on DSKBFK8HB2PROD with BILLS
19 

•S 700 IS

1 ment that the provider will be paid for 

2 such facilitated transaction.’’; 

3 (B) by amending subsection (e) to read as 

4 follows: 

5 ‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY

6 THIRD PARTY SETTLEMENT ORGANIZATIONS.— 

7 ‘‘(1) IN GENERAL.—A third party settlement 

8 organization shall be required to report any informa9 tion under subsection (a) with respect to third party 

10 network transactions of any participating payee only 

11 if the amount which would otherwise be reported 

12 under subsection (a)(2) with respect to such trans13 actions exceeds $1,000. 

14 ‘‘(2) EXCEPTION.— 

15 ‘‘(A) MARKETPLACE PLATFORMS.—In the 

16 case of a third party settlement organization 

17 which is a marketplace platform (as defined in 

18 subsection (d)(3)(C)) through which substan19 tially all the participating payees are primarily 

20 engaged in the sale of goods, such marketplace 

21 platform shall be required to report any infor22 mation under subsection (a) with respect to 

23 third party network transactions of such payee 

24 only if— 


pamtmann on DSKBFK8HB2PROD with BILLS
20 

•S 700 IS

1 ‘‘(i) the amount which would other2 wise be reported under subsection (a)(2) 

3 with respect to such transaction exceeds 

4 $5,000, or 

5 ‘‘(ii) the aggregate number of trans6 actions exceeds 50. 

7 ‘‘(B) OTHER THIRD PARTY SETTLEMENT

8 ORGANIZATIONS.—In the case of a third party 

9 settlement organization other than a market10 place platform— 

11 ‘‘(i) the rules of subparagraph (A) 

12 shall apply in the case of information re13 quired to be reported, or which would oth14 erwise be reported, under subsection (a) to 

15 any participating payee who is primarily 

16 engaged in the sale of goods, and 

17 ‘‘(ii) the determination of whether a 

18 participating payee is primarily engaged in 

19 the sale of goods may be made separately 

20 for each participating payee. 

21 ‘‘(3) ELECTION TO REPORT.—Notwithstanding 

22 paragraphs (1) and (2), a third party settlement or23 ganization may elect to report any information 

24 under subsection (a) with respect to third party net25 work transactions of any participating payee without 


pamtmann on DSKBFK8HB2PROD with BILLS
21 

•S 700 IS

1 regard to the amount reported under subsection 

2 (a)(2) with respect to such transactions or the ag3 gregate number of such transactions.’’; and 

4 (C) in subsection (f)— 

5 (i) in paragraph (1), by striking 

6 ‘‘and’’ at the end; 

7 (ii) in paragraph (2), by striking the 

8 period at the end and inserting ‘‘, and’’; 

9 and 

10 (iii) by inserting after paragraph (2) 

11 the following new paragraph: 

12 ‘‘(3) the amount, if any, withheld pursuant to 

13 section 3402(s).’’. 

14 (f) PROCEEDINGS FOR DETERMINATION OF EMPLOY15 MENT STATUS.—Paragraph (1) of section 7436(b) of the 

16 Internal Revenue Code of 1986 is amended to read as fol17 lows: 

18 ‘‘(1) PETITIONER.—A pleading may be filed 

19 under this section only by— 

20 ‘‘(A) the person for whom the services are 

21 performed, including the service recipient or the 

22 payor, or 

23 ‘‘(B) any service provider which the Sec24 retary has determined should have been treated 

25 as an employee. 


pamtmann on DSKBFK8HB2PROD with BILLS
22 

•S 700 IS

1 All terms used in this paragraph which are also used 

2 in section 7706 have the meanings given such terms 

3 in section 7706(i).’’. 

4 (g) CLERICAL AMENDMENT.—The table of sections 

5 for chapter 79 of the Internal Revenue Code of 1986 is 

6 amended by adding at the end the following new item: 

‘‘Sec. 7706. Determination of worker classification.’’. 

7 (h) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—Except as provided in para9 graphs (2), (3), and (4), the amendments made by 

10 this section shall apply to services performed after 

11 December 31, 2019 (and to payments made for such 

12 services after such date). 

13 (2) GRACE PERIOD TO BEGIN WITHHOLDING.— 

14 A contract shall not be treated as failing to meet the 

15 requirements of section 7706(d)(1)(C) of the Inter16 nal Revenue Code of 1986 (as added by this sec17 tion), and a service recipient or payor shall not be 

18 treated as failing to meet any such requirement, 

19 with respect to compensation paid to a service pro20 vider before the date that is 180 days after the date 

21 of the enactment of this Act. 

22 (3) REPORTING.—Except as provided in para23 graph (4), the amendments made by subsection (e) 

24 shall apply to returns the due date for which is after 


pamtmann on DSKBFK8HB2PROD with BILLS
23 

•S 700 IS

1 the date which is 2 years after the date of the enact2 ment of this Act. 

3 (4) EXCEPTION FOR DE MINIMIS PAYMENTS BY

4 THIRD PARTY SETTLEMENT ORGANIZATIONS.—The 

5 amendment made by subsection (e)(3)(B) shall apply 

6 to payments made after December 31, 2019. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS