I looked at a couple of articles about this repeal and it doesn't seem to have anything to do with EINs. It also appears that having shoppers use EINs rather than SSNs will not help if they have misclassified ICs that should be considered employees. What it seems to be doing is making it easier for companies, like Microsoft, to not be assessed the kinds of fines under the rule they're trying to repeal.

I found one statement interesting:

One of the tests determining whether a worker should be designated an employee or IC is as follows:

"(2) The employer (or a predecessor) has not treated any other individual holding a substantially similar position as an employee for employment tax purposes for any period beginning after Dec. 31, 1977."

So, if an MSC hasn't had any shoppers on their payroll, then there should be no issue with their shoppers being classified as ICs.

This has nothing to do with EINs, other than that TS considers them to be helpful in defining the IC relationship, and is rallying against any repeal of section 530.

Here are 20 standard tests which the IRS has used in the past to help determine IC status. How many do you think apply to shoppers? I find #20 particularly interesting....

1. Worker's availability to the general public - an independent contractor makes services available to the public on a regular and consistent basis. They can demonstrate they are actively seeking and soliciting this type of work from the general public. For example, they list their expertise in directories, seek referrals, and or market their practice.

2. Risk of profit or loss - the IRS generally regards a worker to be an independent contractor if the worker can realize a profit or suffer a loss from performing services, while a worker who cannot realize a profit or loss is generally regarded as an employee. The IRS says, for example, that if a worker is subject to a real risk of economic loss due to significant investments or a bona fide liability for expenses, such as salary payments to unrelated employees, this indicates that the worker is an independent contractor, but the mere risk that a worker will not receive payment for services, which is common to both independent contractors andemployees, is not a sufficient economic risk to support treatment as an independent contractor.

***If worker cannot be justified as an independent contractor under criteria 1 and 2, no further review is needed; the worker must be paid as an employee.***

3. Personal service required - an independent contractor is paid in a lump sum fee basis when the job is done. An invoice must be generated to substantiate the payment.

4. Payment by the hour, week or month - an independent contractor is paid in a lump sum fee basis when the job is done. An invoice must be generated to substantiate the payment.

5. Employer's discharge rights - an independent contractor cannot be terminated as long as they are fulfilling the contract.

6. Worker's termination rights - an independent contractor could be held financially responsible for any loss the employer suffered because they did not fulfill their contract.

7. Continuing relationship Continuing relationship - the relationship between an independent contractor and an employer ends when the job is done.

8. Compliance with instructions - independent contractors cannot be told when, where or how to do the job.

9. Set hours of work - the independent contractor establishes his/her own hours of work.

10. Training - independent contractors do not go through any type of instructional training period with a more experienced employee to learn how to do the job. Independent contractors specialize in the field in which you have employed them and do not need to be trained.

11. Working on the employer's premises - an independent contractor, unless the nature of the service requires, works off-premises.

12. Required work order or sequence - an independent contractor does not need to be told in what order to do the job. They have been contracted with as one that is an expert in this field and do not need to be told how to do the job.

13. Integration into business - the success or continuation of the business is not dependent on the independent contractor's performance of the service.

14. Control over hiring, supervising, and paying of assistants - an independent contractor maintains control of their assistants. The employer contacts the independent contractor if there is a problem, and the employer pays the independent contractor for the work done and then the independent contractor pays the assistants directly.

15. A full-time work requirement - an independent contractor has the availability to work for more than one client.

16. Working for more than one firm - an independent contractor has an established business in which they work for more than one firm.

17. Payment of business or travel expense - an independent contractor is responsible for his/her own business or travel expense. If paid by an employer, the employer must include in the independent contractor's 1099, unless you can verify an accountable plan.

18. Investment in facilities - if the independent contractor maintains an office on the employer's premises, he/she pays a rent or lease payment for the office space as well as overhead.

19. Furnishing of tools and materials - an independent contractor has the necessary tools and materials to do the job.

20. Required reports - an independent contractor is not required to submit oral or written reports.

Steve -- That's been my point this whole discussion. From what I've been reading on the thread, the MSC is using the excuse of classifying shoppers as an IC as the reason they're requiring the EIN. Thanks for finding and posting the criteria for determining IC status. I think we fall under the first two items and probably wouldn't have to go any further. As for number 20, though we do have to submit reports, I think #7 trumps #20. For all intents and purposes, our relationship ends when the shop is completed and paid. If we accept another shop, a new relationship starts again. Many consultants who work as ICs submit reports at the end of a contract so I'm not sure how much weight they carries against the other criteria we meet for IC status.

There are hundreds of sorts of ICs that render written reports based on, e.g., their research. Item 20 refers to reporting in the IC's location, etc. No one, including the IRS, had ever even hinted that, say, my work as a consulting economist was not as an IC because I wrote reports that went to my clients' clients. However, I never was asked to report concerning my whereabouts on any given day or hour. Census takers are, mainly, ICs. They render reports concerning the data gathered and the number of housing units visited; they do not render reports concerning their planned schedules, itinerary, etc.

If I retain an accountant, she/he remains an independent contractor even after returning a complete tax form to me.

There are a ton of examples where ICs don't comply with the above rules. I just found #20 entertaining.

When considering the status of an IC, the IRS will take the entire list into account, apparently. It's not like if you don't meet one item you are disqualified. It's just the components on which they base the decision.

My point was there there are some ways we qualify (1 & 2 for sure) and others that are more fuzzy. TS has decided that having EINs may help as well, despite no official statement from the IRS that it makes a difference. That's their option.

Steve -- From what I understand, this whole IC issue became hot because of things going on in places like Microsoft where they had "ICs" who were doing the same work under the same conditions as employees for years and years. So they started cracking down on those companies. The companies were saving a boat load of cash by not having to pay FICA, benefits and unemployment insurance. So, of course, they're not happy with not only the fines but having to bring those ICs on board as employees.

That's exactly what happened, toots. Any affect on the MS business is more or less collateral damage from the attack on larger corporate offenders.

I was looking on their site again, and they have a whole page about EIN's.

One thing I found interesting is that they post the following link:
(Mancuso, Anthony; Does a Sole Proprietor Need an Employment Identification Number?; Nolo; 2012; [www.nolo.com])

I read the article, and it says we don't!

Too funny!

Andrew TX

Correct; we don't need an EIN.

How ironic is it they keep providing information and links which support what we have said all along.

avitoots Wrote:
-------------------------------------------------------
> And, there is a difference between prepaid debit
> cards and prepaid credit cards. The prepaid
> credit cards had been called secured credit cards.
> Not sure if there is still a differentiation.
> Most debit cards are connected to some kind of
> bank account.


Ok just to clarify, there are a ton of prepaid debit cards out there that are not connected to a bank account. I had one some years ago. You can deposit money with Money gram or other sites that offer that service. Often there are monthly fees attached. Not trying to be "right" or argue, just putting this out there for those who may need this service. Thanks. c

cynb Wrote:
-------------------------------------------------------

>
> Ok just to clarify, there are a ton of prepaid
> debit cards out there that are not connected to a
> bank account. I had one some years ago. You can
> deposit money with Money gram or other sites that
> offer that service. Often there are monthly fees
> attached. Not trying to be "right" or argue, just
> putting this out there for those who may need this
> service. Thanks. c

Green dot cards come to mind...

I will not get an EIN number because I have not built my mystery shopping business up enough yet to have to report my earnings. If I had an EIN I would be forced to do extra work that is not needed at this point in my business. If all shoppers refuse to get one and complain about the requirement the MSCs will be forced to change the policy like Maritz did. I was told by a scheduler that the policy was changed because of a lack of shoppers. However, the shoppers that had one would get first pick of shops.

@avon.lady1 you need to report your earnings whether you earn $50 or $50,000. all income is required to be reported, even if it's under the 600 amount and they dont issue a 1099. Last thing you need is the irs to knock on your door 5 years later for 500 in income you didnt report and now with penalities and interest owe 2000 to them....

As far as an ein, ive said it many times, I've had one for a long time and it adds NOTHING to your federal tax return, and with very limited exception, does nothing to your state level returns either.

While we technically don't need one based on irs rules, I give my ein to any of the companies that are willing to take it.

avonlady,
techman is 100 percent correct. Everything that you earn doing MS must, by law, be reported. You DO NOT need an EIN no matter how large your MS income. Just file a Schedule C, stating your income and expenses. Your write-off for gas, a 55.5 cents per mile and other expenses declared on Schedule C will probably reduce your MS net income to a small amount, but you MUST report that amount.

avonlady - techman and wales are correct about all this income being reportable. The reason even a small amount is reportable is that the rules are different for W2 income and for this type income. If you have only W2 income and if your W2 income is below a certain amount according to IRS regulations, you have no income tax liability and are not required to file a return. Your social security and medicare taxes will have already been deducted by your employer and sent to the IRS. You would not owe any income tax with W2 income below a certain level, but you would have to file to get back any refund due you of income taxes already paid in and any tax credits for which you may be eligible.

If you have income from rental property, trusts, interest, stocks, bonds, or non-W2 income of any kind, then you have to report it no matter how small the amount. You probably won't have much taxable income from your mystery shopping after you take all the deductions to which you are legally entitled, but IRS still requires you to report every dollar of it and take your deductions. If you net over $400 from this venture, then you will owe 15% self employment tax, but you will get a tax credit that will give you a reduction in the amount owed. You file this on a Schedule C which attaches to your 1040 and it is no big deal. Just keep up with all your income, expenses, and the amount of your mileage.

The EIN is not necessary and you can file with only a social security number. If you had a business with employees then you would need an EIN. Some of the shopping companies have asked for an EIN and I have been willing to provide it. Others are not willing to get an EIN and it is really a personal decision based on each individual's circumstances.

When posters on the forum post about taxes it is an effort to assist others who may not have adequate information. None of us would take time out of our schedules to meddle in your business or harass you. We are hoping to help you avoid an unpleasant outcome in the future resulting from not having enough information now. None of us have any interest in whether you decide to report or not report your mystery shopping income. We have the best of intentions and hope you will accept our advice as a generous kindness.

the.avon.lady1 Wrote:
-------------------------------------------------------
> If all shoppers refuse to get one and complain about the
> requirement the MSCs will be forced to change the
> policy like Maritz did. I was told by a scheduler
> that the policy was changed because of a lack of
> shoppers. However, the shoppers that had one
> would get first pick of shops.


An interesting post.

I agree that if an MSC that "requires" an EIN gets too few shoppers with an EIN, they may not be able to get enough reports to serve their clients. Trendsource has extended the deadline to supply an EIN and has offered more bonuses in my area. These things suggest they don't have enough shoppers with an EIN. As for me, they told me I would be deactivated without supplying an EIN.

We will see what happens. Either way, there are other MSPs out there.



Edited 1 time(s). Last edit at 06/18/2012 01:48AM by vlade5394.

The good jobs are flying off the boards, so the EIN hasn't stopped shoppers from getting one, including me. They pay quickly, but I miss those grocery shops.

I haven't applied for any TrendSource jobs and I haven't gotten an EIN. I've never seen so many scheduler e-mails from TrendSource as I have during the past few weeks so I'm not sure whether the jobs are flying off the boards or not. It's interesting that they have extended the final date. Last year when Maritz announced it would require an EIN, it extended the date a couple of times before changing their minds and removing the requirement for an EIN. Time will tell.

The only email I get from TS is for the pizza JOBS,which are in excess with all MSC's that do them.....I delete, never have, never gonna do them.

Irene_L.A. Wrote:
-------------------------------------------------------
> The only email I get from TS is for the pizza
> JOBS,which are in excess with all MSC's that do
> them.....I delete, never have, never gonna do
> them.


LOL, I think you remember when they used to called the "mutilated pizza shops" because one had to cut the pieces then stand the partial pieces on their sides. I wouldn't do them then either. However, the requirements have since changed. Photos are required without any pizza surgery. For one comfortable with photography, I find them quite easy.



Edited 1 time(s). Last edit at 06/18/2012 02:51AM by vlade5394.

walesmaven,

I got that. I was just enjoying the irony of them posting a link on their page about "why you NEED NEED NEED and EIN" that links to an article that explains all the reasons you DON'T need and EIN.

I'm sorry if my attempt at irony was lost on you. Thank you for your quick response anyway.

walesmaven Wrote:
-------------------------------------------------------
> Correct; we don't need an EIN.

I did one of those "mutilated pizza" shops and a revealed shop at a sandwich place but never got paid. I had the unfortunate timing of signing up when their IC agreement still said EIN OR SSN, but the website wouldn't take my SSN.

I recently emailed them explaining that I would still like to get paid, and they quickly emailed back promising that a check was going out to me. Fair enough.

I may yet decide to get an EIN, but until then I'm glad they are doing right by me.

It's always good to not burn your bridges, and they haven't burnt theirs with me as of yet. Perhaps I will mutilate some more pizza for them in the future.

vlade5394 Wrote:
-------------------------------------------------------
>
> LOL, I think you remember when they used to
> called the "mutilated pizza shops" because one had
> to cut the pieces then stand the partial pieces on
> their sides. I wouldn't do them then either.
> However, the requirements have since changed.
> Photos are required without any pizza surgery.
> For one comfortable with photography, I find them
> quite easy.

On one of the Trendsource threads, I stated my opinion they wouldn't, as had Maritz, back off the requirement of an EIN; when they extended the date, it was a sign that perhaps I was wrong. Today, when I attempted to sign onto the site, I was denied entrance. It now seems they've decided to hold fast with their decision, but, of course, only time will tell the rest of the story.

I moved their link to my folder titled "Idle" where they have joined the ranks of ACE and Ath Power Out of curiosity I attempted to login and was able to get a screen saying the deadline for submitting the EIN has been extended until tomorrow. I also have the option to request a shop and according to them any shops assigned prior to the deadline can be completed and will be paid even if the actual shop date is post-deadline.

Interesting note. In the past the list of backup assignments has been most of the page with just a few still available. Now at least 2/3 of the shops within a 50 mile radius are available.

Lisa -- That's interesting that most of the shops are available. That in and of itself tells the tale.

not really seeing an increase in any of the states i shop for them in available shops vs what I use to see.

I've never had issues with them in the past, and they always have done right by me. I've "bailed them out" a number of times with shoppers that were flakes.

I already use an ein for shopping(and have for years), so this is a non-issue to me, and it should be for most shoppers with the exception of the select few that may be affected on a rare local level.

Bob. I just logged on - No Problem. Tomorrow will tell...

I have never gotten an e-mail from Trendsource until today for some medical shops. The interesting thing is that under "other requirements," there is absolutely no mention of needing an EIN to work for them.

Another deadline extension. I guess they don't have enough shoppers with an EIN.