quired under paragraph (1) shall be provided within 
a reasonable period of entering into the contract re-
ferred to in paragraph (1). 
‘‘(4) DEVELOPMENT OF MODEL STATEMENT.— 
The Secretary shall develop model materials for pro-
viding the statement required under paragraph 
(1).’’. 
(b) REDUCED PENALTY NOT APPLICABLE IN CASES 
OF NONCOMPLIANCE WITH GUIDANCE WITHOUT REA-
SONABLE BASIS.—Subsection (c) of section 3509 of such 
Code is amended— 
(1) by striking ‘‘if such liability’’ and inserting 
‘‘if— 
‘‘(1) such liability’’, and 
(2) by striking the period at the end and insert-
ing ‘‘, or 
‘‘(2) such liability relates to an individual who 
is treated as an employee under regulations or other 
guidance issued by the Secretary under section 
3511(a) and the taxpayer lacks a reasonable basis 
for treating the individual as other than an em-
ployee. 
In the case of a taxpayer which has received a final written 
determination from the Internal Revenue Service holding 
that the individual referred to in paragraph (2) (or an-
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other individual who holds a position with the taxpayer 
substantially similar to the position held by such indi-
vidual) is an employee, such taxpayer shall be treated for 
purposes of paragraph (2) as lacking a reasonable basis 
for treating such individual as other than an employee 
with respect to periods beginning on and after the first 
day of the first calendar quarter beginning more than 180 
days after the date of such written determination unless 
the taxpayer establishes by clear and convincing evidence 
that the taxpayer has a reasonable basis for such treat-
ment.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 6724(d) of such 
Code is amended by striking ‘‘or’’ at the end of sub-
paragraph (GG), by striking the period at the end 
of subparagraph (HH) and inserting ‘‘, or’’, and by 
inserting after subparagraph (HH) the following 
new subparagraph: 
‘‘(II) section 3511(e) (relating to state-
ments to independent contractors).’’. 
(2) Paragraph (2) of section 7436(a) of such 
Code is amended by striking ‘‘subsection (a) of sec-
tion 530 of the Revenue Act of 1978’’ and inserting 
‘‘section 3511(b)’’. 
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(3) The table of sections for chapter 25 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 3511. Authority to issue guidance clarifying employment status.’’. 
(d) TERMINATION OF SECTION 530 OF THE REV-
ENUE ACT OF 1978.—The Revenue Act of 1978 is amend-
ed by striking section 530. 
(e) REPORTS ON WORKER MISCLASSIFICATION.—Be-
ginning with the first fiscal year beginning after the date 
the first regulation or other guidance is issued for public 
comment under section 3511(a) of the Internal Revenue 
Code of 1986 (as added by this section): 
(1) A report each fiscal year on worker classi-
fication which shall include the total number of ex-
aminations of employers initiated because of sus-
pected worker classification issues, the total number 
of examinations that included determinations on 
worker classification issues, the amount of additional 
tax liabilities associated with worker classification 
enforcement actions, the number of workers reclassi-
fied as a result of these actions, the number of re-
quests for Determination of Worker Status (Form 
SS–8), and technical guidance on how to understand 
the data provided in the report. 
(2) A report each fiscal year in which new sta-
tistically valid data is compiled and interpreted on 
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worker classification, prepared on the basis of infor-
mation gathered during an Employment Tax Study 
conducted by the National Research Program (NRP) 
of the Internal Revenue Service. Such report shall 
provide statistical estimates of the number of em-
ployers misclassifying workers, the number of work-
ers misclassified, the industries involved, data inter-
pretations and conclusions, and a description of the 
impact of improper worker classification on the em-
ployment tax gap. 
(f) EFFECTIVE DATES.— 
(1) DELAYED
EFFECTIVE
DATE
OF
REGULA-
TIONS AND GUIDANCE.—Except as provided in para-
graph (2), any regulation or other guidance issued 
under section 3511(a) of the Internal Revenue Code 
of 1986, as added by this section, shall not apply to 
services rendered before the date which is 1 year 
after the date of the enactment of this Act. 
(2) TREATMENT OF SECURITIES BROKER DEAL-
ERS.—Paragraph (9) of section 3511(d) of the In-
ternal Revenue Code of 1986, as added by this sec-
tion, shall apply to services performed after Decem-
ber 31, 1997. 
(3) AUTHORITY TO ISSUE REGULATIONS AND 
GUIDANCE IMMEDIATELY.—So much of the amend-
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ment made by subsection (d) as relates to subsection 
(b) of section 530 of the Revenue Act of 1978 shall 
take effect on the date of the enactment of this Act. 
(4) DELAYED TERMINATION OF REMAINDER OF 
SECTION 530 OF THE REVENUE ACT OF 1978.—Ex-
cept as provided in paragraph (3), the amendments 
made by subsections (c)(1) and (d) shall apply to 
services rendered on or after the date which is 1 
year after the date of the enactment of this Act. 
Æ 
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