I've noticed a lot of people are taking jobs as an independent contractor, sometimes to supplement their income, and sometimes as a way to build a career as their own boss. I'm generally in favor of people being their own boss. It's a rewarding career path and can pay off financially. Nonetheless I do get concerned, and perhaps a little protective, when I hear from new college graduates and other people just entering the workforce that a company is going to treat them as independent contractors. Sometimes this is legitimate, but sometimes this is a move on the part of companies to avoid paying payroll taxes at the expense of their workers.

A comment left on the post "What's Form W-9?" caught my attention in this regard. The question deserves a fuller response, and you might have some advice to add yourself.

The question asked was this:

"Hi, I am a fresh grad with no idea about this income tax thing. I joined a website [...] where people hire you online. My problem is the site is asking me to submit a W9 form and I don’t know what it is for. I have never been employed and I don’t have any ideas what will happen if I pass that form. Will I be doing income tax returns when I submit that form? Will I be he one to compute my income tax? Sorry for being stupid but I really need help."

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National Taxpayer Advocate Nina Olson highlights the top five tax issues for taxpayers dealing with the IRS in her semi-annual report to Congress. The five top issues are

• complex procedures for responding to identity theft cases,
• identifying how canceled debt income from foreclosures will be processed by the IRS,
• trends towards more aggressive collection activities by the IRS,
• whether outsourcing collection services to third-party firms has created inefficiencies, and
• concerns over lingering tax debts caused by incentive stock options.

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