Patent ID: 6898573

Claim:
A method for ensuring that an independent contractor service provider that performs services for a contracting entity preserves independent contractor status and has funds available to pay a taxing authority for a current tax year, the method comprising: retaining a third-party escrow manager by a contracting entity; providing services to the contracting entity by the independent service provider; submitting tax-related data by the independent service provider to the third party escrow manager, the tax-related data including income and expense data for services of the independent contractor unrelated to the contracting entity; processing the tax related data with a computer, to estimate taxes that the independent service provider owes the taxing authority; deducting a portion of monies due the independent service provider by the contracting entity and retaining the portion of the monies in an escrow account; and submitting payment to the taxing authority in a timely manner of at least some of the monies in the escrow account retained from the independent service provider, without substantially affecting any tax liability that the contracting entity owes the taxing authority for the current tax year except for fees that may be paid to the escrow manager.