Internal Revenue Code:Sec. 3508. Treatment of real estate agents and direct sellers

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle C - Employment Taxes
       CHAPTER 25 - GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES
     

Statute

    Sec. 3508. Treatment of real estate agents and direct sellers
 
    (a) General rule
      For purposes of this title, in the case of services performed as
    a qualified real estate agent or as a direct seller -
        (1) the individual performing such services shall not be
      treated as an employee, and
        (2) the person for whom such services are performed shall not
      be treated as an employer.
    (b) Definitions
      For purposes of this section -
      (1) Qualified real estate agent
        The term ''qualified real estate agent'' means any individual
      who is a sales person if -
          (A) such individual is a licensed real estate agent,
          (B) substantially all of the remuneration (whether or not
        paid in cash) for the services performed by such individual as
        a real estate agent is directly related to sales or other
        output (including the performance of services) rather than to
        the number of hours worked, and
          (C) the services performed by the individual are performed
        pursuant to a written contract between such individual and the
        person for whom the services are performed and such contract
        provides that the individual will not be treated as an employee
        with respect to such services for Federal tax purposes.
      (2) Direct seller
        The term ''direct seller'' means any person if -
          (A) such person -
            (i) is engaged in the trade or business of selling (or
          soliciting the sale of) consumer products to any buyer on a
          buy-sell basis, a deposit-commission basis, or any similar
          basis which the Secretary prescribes by regulations, for
          resale (by the buyer or any other person) in the home or
          otherwise than in a permanent retail establishment,
            (ii) is engaged in the trade or business of selling (or
          soliciting the sale of) consumer products in the home or
          otherwise than in a permanent retail establishment, or
            (iii) is engaged in the trade or business of the delivering
          or distribution of newspapers or shopping news (including any
          services directly related to such trade or business),
          (B) substantially all the remuneration (whether or not paid
        in cash) for the performance of the services described in
        subparagraph (A) is directly related to sales or other output
        (including the performance of services) rather than to the
        number of hours worked, and
          (C) the services performed by the person are performed
        pursuant to a written contract between such person and the
        person for whom the services are performed and such contract
        provides that the person will not be treated as an employee
        with respect to such services for Federal tax purposes.
      (3) Coordination with retirement plans for selfemployed
        This section shall not apply for purposes of subtitle A to the
      extent that the individual is treated as an employee under
      section 401(c)(1) (relating to self-employed individuals).
 

Sources

    (Added Pub. L. 97-248, title II, Sec. 269(a), Sept. 3, 1982, 96
    Stat. 551; amended Pub. L. 104-188, title I, Sec. 1118(a), Aug. 20,
    1996, 110 Stat. 1764.)
 

Miscellaneous

                                 AMENDMENTS
      1996 - Subsec. (b)(2)(A). Pub. L. 104-188 added cl. (iii).
                      EFFECTIVE DATE OF 1996 AMENDMENT
      Section 1118(b) of Pub. L. 104-188 provided that: ''The
    amendments made by this section shall apply to services performed
    after December 31, 1995.''
                               EFFECTIVE DATE
      Section 269(e) of Pub. L. 97-248 provided that:
      ''(1) In general. - Except as provided in paragraph (2), the
    amendments made by this section (enacting this section and amending
    section 410 of Title 42, The Public Health and Welfare) shall apply
    to services performed after December 31, 1982.
      ''(2) Subsection (c). - The amendments made by subsection (c)
    (amending provisions set out as a note under section 3401 of this
    title) shall take effect on July 1, 1982.''
                           RULES AND REGULATIONS
      Section 269(c)(3) of Pub. L. 97-248 provided that: ''Nothing in
    section 530 of the Revenue Act of 1978 (set out as a note under
    section 3401 of this title) shall be construed to prohibit the
    implementation of the amendments made by this section (enacting
    this section, amending section 410 of Title 42, The Public Health
    and Welfare, and amending provisions set out as a note under
    section 3401 of this title).''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in title 42 section 410.