Independent Contractors and the (Deadly) Spirit of 1706

February 22nd, 2010 by

Joseph Stack set his house on fire and then piloted a small plane into a building housing the IRS in Austin, Texas. His daughter calls him a hero. Most of us would call him a terrorist. But whatever you call him, he was motivated in part by section 1706 of the 1986 Tax Reforms. Stack was a software engineer, and thus was directly impacted by the following language in the statute, which forbids the hiring of software engineers as independent contractors:

(d) EXCEPTION. – This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.

As a result of this unusual and highly specific language, programmers are almost always compelled to work as employees. Unlike the situation for most workers – who may or may not meet the criteria for independence – there is virtually no wriggle room for engineers.
Stack’s self-identity as a tax protester goes deeper and taps a rich pathological vein. Envious of the tax exempt status granted to religious organizations, he tried to establish his own church, in his own home. Ten years and $40,000 in tax liabilities later, he gave it up. But he surely did not forget, nor did his daughter, Samantha Bell, who appears to be the last remaining worshipper at the defunct church.
Bell concedes that her father’s actions were “inappropriate.” Nonetheless, she considers him a hero for taking a stand for “justice.” Some stand, some notion of justice! In addition to his own life, Stack’s violent act took the life of IRS manager Vernon Hunter and had the potential for killing many more innocent people.
Ironically, the national consensus building around independent contractors is quite the opposite of what Stack envisioned. There is a concerted effort at the federal and state levels to view most working relationships as employer/employee. The burden of proof has shifted onto the companies (most notoriously, FedEx) that try to avoid taxes by calling people “independent contractors.”
Joseph Stack might have thought himself a martyr for the cause of tax reform. He is surely something else: a symbol of the violence, fanaticism and rage that threatens to destabilize the most enduring democracy the world has ever known. Not exactly my idea of a hero.

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