I've copied the text below.

Any thoughts?

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States, Federal government action may cost you
by ACE Admin


Current proposed legislation in all 50 states and on Capitol Hill could leave mystery shoppers without work.

The MSPA and itsmybusiness.com have shopper's best interests in mind, and are letting lawmakers know proposed independent contractor legislation could have broad consequences for more than just mystery shopping.
The MSPA and itsmybusiness.com have shopper's best interests in mind, and are letting lawmakers know proposed independent contractor legislation could have broad consequences for more than just mystery shopping.

The current assault against independent contractors emerged from an Obama Administration initiative to look into lost tax revenue for independent contractors in all industries. The largest industries targeted are the trucking and courier industries. About 10.3 million Americans work as independent contractors, including journalists and medical workers. Mystery shopping is among the industries legitimately using 1099, the tax classification for independent contractors, to conduct business.

MSPA Executive Director Dan Denston said mystery shopping could be a victim of broad legislation that would lead to outlawing independent contractors in every industry.

"They're after the truckers and couriers," said Denston, who compared the effort to the tuna fishing industry in which dolphins were being killed in the process of catching tuna. "They're hauling in the tuna, which they think is the big problem. And mystery shopping is the dolphin. You're killing the dolphins and tuna."

Denston said the industry relies on a "legitimate model that has to rely on independent contractors." Denston said the model used by legitimate mystery shopping companies does not cost the government any lost tax revenue but he said most lawmakers don't understand what mystery shopping is and what it means to businesses. The grim outlook with passage of this legislation is the near eradication of the industry, the majority of which is made up of small companies.

"You're really only going to be able to work for one company," Denston said, pointing out most shoppers work for more than one company. "If you're an employee of ACE Mystery Shopping, chances are you can't also be an employee of XYZ Mystery Shopping. I think that is the big impact on the mystery shoppers. They really will be limited to what they can shop."

Leading the opposition to this legislation is itsmybusiness.com, a website devoted to protecting the rights of independent contractors. The site provides details about how such legislation would affect the many diverse industries dependent on the work of independent contractors. MSPA and itsmybusiness.com are working together in Washington, as well as with state legislatures to educate lawmakers as to the ramifications of such measures that would eliminate independent contractors, or make their use more difficult.

MSPA and itsmybusiness.com are trying to rally support from mystery shopping companies and shoppers to bring awareness. For more information, visit itsmybusiness.com and see what you can do to save your mystery shopping jobs.

ACE Admin | October 3, 2013 at 9:05 pm

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Market Viewpoint is offering a teleconference regarding IC status. It's being conducted by Angela/Market View, and Chuck Kenerson, the owner of QSI. He is also a past president of the IASE. They will discuss the efforts of the mystery shopping industry to work with the IRS. The teleconference is free, if anyone is interested in listening in.

Ugggggggh! Sorry I just had to vent. I find this so incredibly annoying! Mystery shopping is one of the streams of income in my life and actually one of the more fun and diverse ones and though I'm dreading filing taxes next year, I intend to claim everything and the flip of that is that I am going to write everything off that I legally can. I am not a tax evader as seems to be the jist of this.....or am I reading this wrong? Even if the economy were to overnight get golden again and I could make decent money again, I would still mystery shop on the side as I have found that for the most part I genuinely enjoy this and I sure like the few freebies I have received - a flip phone with prepaid months on it, a lawn and leaf bag, a couple of lunches at low end places, sandwiches and buffalo chicken for free - other than the time to get there and back and submit the easy reports - and what else? Yes, even a comped haircut! f

I understand that we are going through tough times in America but please don't take away this income stream if I am above board and claiming all income. Do you'all agree with me here?

Edited 1 time(s). Last edit at 10/12/2013 08:19AM by squireparty.

This is just a rehashing of the MSPA attempt to get shoppers to back legislation that would allow them to continue treating schedulers and editors that they treat as employees but pay as independent contractors (probably in violation of current law). They have been trying for years to get us to all lobby on behalf of MSPA interests with our members of congress and senators. Remember, MSPA's is an interest group that lobbies on behalf of Mystery Shoppping Company interests. In this case, ther interests do not appear tocoincide with those of shoppers.
Don't drink their Koolaide! Current federal law and regulations donot actually threaten shoppers' I status.
I speak here as a PhD in Industrial Relations and LaborEconomics. Current labor law and its court and IRS interpretations do not threaten shoppers' ICA staus, They probably do mean, tho, that many MSCs are violating the law concerning their schedulers and/or editors.

Walsemaven beat me to it, but I echo her sentiment.

I also find it ironic that Market View is bringing in a expert to speak on this subject who actually employes me (and hundreds of other MSers) as employees. While I agree that Chuck Kenerson may hold the solution to this problem, I think that solution is probably to follow his business model of employing (and protecting) shoppers, rather than rallying for a status that allows the system to stay as it is...

I will repeat what I have said whenever this subject has come up in the past; If requiring employee status for shoppers would put the industry out of business, why is Nevada mystery shopping still going strong?

I really doubt that Independent Contractors will be gone from the landscape. Many industries use people to come in once in a while to do specialized jobs for them. Some of these people do not have a company of their own and do not want or need the paperwork required to set one up. In some cases these are called consultants. Perhaps they will change the name of the beast and the rules and make it so it is harder for a large industry to use a worker on a regular basis to do the same job on the same schedule which is or approaches full time where the worker has to commit to do those jobs into the future. These types of workers might welcome being put on payroll and given the benefits of being a regular employee. But our industry is a far cry from the person who knows that they will be working on a job, the same job, regularly for a long time. Especially now with an unemployment rate so high, I would bet the government is not interested in targeting people who are able to pick up some income here and there to support themselves. If IC is gone it will become some other letters or in some other format.

I can only imagine big comapnies like direct tv or ATT that hire people all over the USA to go to customers' homes and fix damages. The bills would become huge :O I am sure IC will continue...but I think they will adjust it somehow.

The way I see it, they will adjust the way you get money back from IRS. As it is now, company can pay lower wages because they use the fact that IC get mileage paid back by IRS. Probably IRS will figure out a way to reverse that cost back to the industry. Talking to the Dish Network IC who came and fixed my dish, he told me that only the previous hear for travelling he deducted something like 15 grands (if I well remember).

And no, MSCs do not care about IC as they said, or they would not keep lowering the fees to put more money in their pockets. They just do not want to lose IC that get them money...and I wonder if they actually hired us like they said, if minimum wage applies LOL.

Technically, none of us are really "employees" of any MS companies anyway....

So relax folks. IC's will never be done with. This is just fear mongering..

dixiewhiskey Wrote:
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> Technically, none of us are really "employees" of
> any MS companies anyway....

Dixie, many shoppers are actually legal employees of MSCs. Some MSC's employ me to do the exact some work as those who contract me.

The issue here is the fine line between employee and IC, and the scope of work as it relates to potential contractor status.

Since I have worked from both sides, I can tell you that there are advantages and disadvantages to each, but the removal of contractor status would certainly not be the death of the MS industry.

As stated in the first post:

The MSPA and itsmybusiness.com have shopper's best interests in mind.

BOB'S opinion:

They do not, nor should they, have a contractor's best interests in mind. Were I a member of the MSPA AND were that true, I would remove my MSC from the rolls. In addition, were I a shareholder of an MSC and I learned they were so concerned with contractor's well being, I'd be very displeased.

The above reminds me of a posting on the Volition board; I think it was 01/09. The owner of a scheduling company requested shoppers work for less to aid MSCs who were having financial difficulty.

How do you figure? Have you signed a contract stating that you are an employee? I'm not employed by any MSC and by signing, initialing or agreeing that I am not an employee, I'm not an employee. A lot of people here have signed contracts like that and unless you have signed a different contract that says otherwise, I assume most folks here are not employees (therefore nothing to really worry about).

I agree too that if contractor status was removed, there would still be plenty of opportunities for all. You'd still have to pay taxes, you may get benefits, who knows... This all doesn't really affect me as I live in a different country but I thought I'd chime in anyway because a lot of contracts I have read state you will never be an employee. Obviously that could change by signing a new contract..

SteveSoCal Wrote:
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> dixiewhiskey Wrote:
> --------------------------------------------------
> -----
> > Technically, none of us are really "employees"
> of
> > any MS companies anyway....
>
> Dixie, many shoppers are actually legal employees
> of MSCs. Some MSC's employ me to do the exact
> some work as those who contract me.
>
> The issue here is the fine line between employee
> and IC, and the scope of work as it relates to
> potential contractor status.
>
> Since I have worked from both sides, I can tell
> you that there are advantages and disadvantages to
> each, but the removal of contractor status would
> certainly not be the death of the MS industry.

For one, Nevada only allows mystery shops to be completed by employees, no ICs there. I'm sure Steve knows the difference between being an employee and an IC. He has been in the business for a long time and in many different roles. Even if he wasn't sure, no doubt the tax documents he receives at the end of the year would certainly be a tip off

dixiewhiskey Wrote:
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> How do you figure? Have you signed a contract
> stating that you are an employee?

I see that Lisa beat me to the answer, but why would I have a signed contract as an employee? I'm not a contractor in that case.

I work for some MSC's as an employee. I applied, was hired, signed a W-4, signed non-disclosures, report my hours, and have taxes taken out of my paychecks. There's no confusion about it.

If you were not aware that some companies work this way, you should be. No all MSers are IC's.

What I do not understand about this whole thread and the original post is about the lost revenue to the IRS for taxes. For mystery shoppers as we know, we are sent a 1099 if our wages are over $600 in a year from one company. I would imagine if one is a trucker and that person works for the same company more than a few times in a year they would garner enough income to trigger a 1099. Truckers get paid a H... of a lot more than the $under 10 an hour we generally get paid and one job for them is more than 20 minutes of their time so they would hit the $600 mark a lot faster. I am not sure the $600 rule is the same for trucking companies but I would be fairly certain there is some rule out there.
The problem as I imagine it is people working under the table perhaps for small companies that just pay them cash. So what I would think they would be tightening up is the way they can find these companies and crack down on them. They did it in the restaurant industry where now servers are required to report a minimum amount of tips, even if they do not earn them. In cash businesses there is a lot of misreporting and it is not just the independent contractors that hire them that seem to get away with income that they do not report. I for one would like to see everyone on an equal footing when it comes to paying taxes from the bottom to the top of the wage scale. Perhaps they will do this by changing or tightening the rules for what is an independent contractor. I know they did this several years ago in my state with a tighter definition of "exempt" vs "non exempt" employees which was helpful for loads of employees who really were not the management type people that exempt was meant to mean but were being shorted on overtime, 6 day weeks and other state labor rules because their employers labled them as exempt from state rules. We already have ways in place for the government to know our incomes. I am pretty sure there are some unscrupulous mystery shoppers who do not report their income (none on this forum of course) but you cannot close all loopholes, so I really doubt this kind of thing will affect us much if it is indeed true. Sorry I should not use the word unscrupulous...should I say people who just tell some little white lies? I will admit I have a few times told little white lies myself...but not to the taxman or woman. And perhaps the government shut down will continue til April 15 and then none of us will be able to file taxes even if we want to.

The Obama administration has been threatening this legislation since he came to office for his first term. If anyone thinks that Congress is going to move on anything having to do with ICs at the point, they are mistaken. Congress has so much on their plate at the present time that it will be a long, long time before they will even start the debate about this issue.

Actually these alleged threats go back years, so before the current administration. As I understand it the issue is not just about taxes paid or not paid by the ICs as much as companies dodging their taxes and legal responsibilities by classifying workers as ICs who legally should be considered employees. I won't name the company who had a worker on their books for year before making her an employee. Prior to changing her status the job was exactly the same. They told her when she would report to work at their offices and what she would do while she was there. While the company avoided the additional contributions they would be required to pay, she ended up paying higher taxes because she had no clue a lot of her expenses were tax deductible.

Lisa has hit on the REAL issue that proposed legislation is aimed at: mis-classifying people who are treated as employees but paid (and denied benefits) as ICs. We are not treated like employees, but many schedulers and editors for MSCs ARE misclassified. In the IT industry this is a HUGE problem that has made the business press for years and years.

Does anyone have the phone # and passcode for the teleconference?

Mert Wrote:
-------------------------------------------------------
> Market Viewpoint is offering a teleconference
> regarding IC status. It's being conducted by
> Angela/Market View, and Chuck Kenerson, the owner
> of QSI. He is also a past president of the IASE.
> They will discuss the efforts of the mystery
> shopping industry to work with the IRS. The
> teleconference is free, if anyone is interested in
> listening in.

LisaSTL Wrote:
-------------------------------------------------------
> Actually these alleged threats go back years, so
> before the current administration. As I understand
> it the issue is not just about taxes paid or not
> paid by the ICs as much as companies dodging their
> taxes and legal responsibilities by classifying
> workers as ICs who legally should be considered
> employees. I won't name the company who had a
> worker on their books for year before making her
> an employee. Prior to changing her status the job
> was exactly the same. They told her when she would
> report to work at their offices and what she would
> do while she was there. While the company avoided
> the additional contributions they would be
> required to pay, she ended up paying higher taxes
> because she had no clue a lot of her expenses were
> tax deductible.

I ran into this at a former job. My boss hired someone to come in and work temporarily on a 1099 basis. She liked his work so he began working the usual 8-5, 40 hours a week. I believe several months passed before she put him on payroll as an employee. She did that with other workers too and even advertised for a "1099 worker" in job postings.

And then we got audited by the state tax authority. The paperwork was a nightmare and naturally my boss told me it was my problem to handle, and left it to me to justify having an 8-to-5 employee as an "independent contractor". The state eventually ruled that every 1099 worker had been misclassified and should have been a payroll worker, paying payroll taxes.

A company I worked at as an auditor paid us all as contractors for years and we were happy to be so. Then one of them wasn't making any money and filed for unemployment. After a court hearing, we were ALL reclassified as employees. It definitely can happen. But the circumstances for that were NOTHING like our circumstances as shoppers. We choose our jobs. We choose our hours. We decide how we will carry out the assignment. We don't work on our "employer's" premises or use his equipment. We have risk of loss (if a shop is rejected, we don't get reimbursed for expenses or mileage). For MOST of us, they would be hard-pressed to identify us as employees.

For some here, though, who work for one company, perhaps doing the same routes of audits month after month, they might fall under the "employee" rules. MAYBE. But very few of us work like that. When I go out on a route, I might work for one company that day or seven. And I've never done the same route twice; in fact rarely do I even shop the same location twice.

Even going after all the "under $600" shoppers, who might make sure they never crossed that threshold so the IRS would never know they were mystery shopping, wouldn't get them much since the mileage allowance usually wipes out the income from low-end shops so they're more likely to be forgoing a deductible loss than avoiding paying tax on income. Let's pay an auditor $5000 to audit some mystery shopper to determine that the $1000 he made last year on fast food shops and didn't report is actually offset by $1100 in mileage deductions so the IRS actually owes HIM $20. That's an efficient use of our tax dollars.

dspeakes Wrote:
-------------------------------------------------------
> Even going after all the "under $600" shoppers,
> who might make sure they never crossed that
> threshold so the IRS would never know they were
> mystery shopping, wouldn't get them much since the
> mileage allowance usually wipes out the income
> from low-end shops so they're more likely to be
> forgoing a deductible loss than avoiding paying
> tax on income. Let's pay an auditor $5000 to
> audit some mystery shopper to determine that the
> $1000 he made last year on fast food shops and
> didn't report is actually offset by $1100 in
> mileage deductions so the IRS actually owes HIM
> $20. That's an efficient use of our tax dollars.

You are in left field and have completely missed the point here. I don't think the IRS is worried about the mystery shoppers. Its the MSC's who are getting by with murder here. While 90% of the companies in this country are paying their employees and thier taxes according to the standard approved method we have companies such as these MSC's who are mobilizing huge workforces and not paying a dime toward social security or nothing. Its unfair to legit companies and its unfair to the mystery shoppers and its just not right.

dspeakes: Mystery shoppers making under 600 dollars,
they would not be allowed to take the mileage deduction
as it would be considered a hobby and disallowed and they
would be liable for the full taxable amount...

LisaSTL Wrote:
-------------------------------------------------------
> For one, Nevada only allows mystery shops to be
> completed by employees, no ICs there.

I am fairly close to a location in Nevada so I did some research on the situation. You not only have to be an employee of a company , you must take a test, get a license with a fee and become a "private investigator". The company hires private investigators and they take the assignments as "Unrevealed audits."
It is my belief that this effort has nothing to do as far as taxes. Nevada has gaming and casinos everywhere in most parts of the state. The gaming commission highly regulates many issues in the state due to 24 hour alcohol, gambling and other situations.
I found that out some time back as a relative once worked for the local government in a county there. Even county governments have certain laws that may seem different.
Most of the regulations have to do with the gaming industry. For example if you did a casino shop on Tribal Lands, the tribe might be shopping their own casino. If you did a shop in a Las Vegas casino it is highly regulated and you must be a "private investigator".
The fees or what is wages there are much higher per job due to the demand for evaluators of all types of situations.

The requirement for Nevada shoppers to be employees has absolutely nothing to do with taxes (you don't even pay state income tax as an employee).

The blog the OP was referring to insinuates that making shoppers employees would destroy the MS industry. The fact that Nevada has worked out a system that allows shoppers to be employees and the industry still exists there is strong evidence that the industry would continue under a requirement of making shoppers employees nationwide.

techman01 Wrote:
-------------------------------------------------------
> dspeakes: Mystery shoppers making under 600 dollars, they would not be allowed to take the mileage deduction as it would be considered a hobby and disallowed and they would be liable for the full taxable amount...


techman01, I believe you are wrong. I was a professional tax preparer and tax instructor for years.

There is no limit on the amount an IC makes before they have to report it. If you get $100 from an MSC, you have to report it - you just don't get a 1099-MISC. If the IRS audits an MSC and finds that the ICs have not reported income <$600, they can come after them. However, the IRS might not is the amount is too small to spend time on. That's why people think the IRS doesn't care about earnings under $600. But you never know when they will come after you, with interest and stiff penalties for not reporting.

As for designating it as hobby income, that only happens when a person is self-employed and declares losses year after year. From the IRS website: "The IRS presumes an activity is engaged in for profit if the activity is profitable for 3 years of a consecutive 5 year period or 2 years of a consecutive 7 year period for activities that consist of breeding, showing, training, or racing horses. This presumption rule applies only after an activity incurs a third profitable (or second) profitable year within a 5 year (or 7 year) presumption period that begins with the first profitable year."

If you declare losses for 3 years straight, the IRS will declare your business as a hobby and you can't take any losses. They will refigure your income tax for all those years. However, that doesn't mean you can't take deductions. If you receive $100 from an MSC and your mileage was $20, then you are taxed on $80.

However, one thing I found again and again - the people who had business losses year after year had very poor record keeping. They would say things like they used their car 100% for business. I would ask if they used that car to buy groceries, go out to eat, go to the doctor, etc, and they would say yes. Well, then, the car is not a 100% write off. Same with mileage. People would say, "Oh, I drove about 5000 miles last year." I would ask for their records and they wouldn't have any!

My worst clients were those that "sold" Amway. They would go to a seminar where someone would tell them they could write off all their mileage, their clothing, their phone, part of their house, travelling to seminars, etc. And they were great record-keepers. They would sell $500 of Amway and show me $7000 of expenses. Sigh. I did taxes for lots of people after they got their IRS letters. The IRS eats multi-level marketing people alive.

niteowl, what you are saying is exactly what I was referring to
I just didn't go into detail. If you are earning 2000 from mystery
shopping but do not show a profit year after year, as you said they
will disallow your deductions and call it a hobby...

There are people out there that think as you stated can show 800 in
income and then have deductions of 5000 to make that 800 and that
it is ok....

During his campaign, Obama said that he will look into the loops and recoup the money to the budget. So this is what he was talking about? You got to be kidding me...The money is somewhere else...not here..

LisaSTL Wrote:
-------------------------------------------------------
> Actually these alleged threats go back years, so
> before the current administration. As I understand
> it the issue is not just about taxes paid or not
> paid by the ICs as much as companies dodging their
> taxes and legal responsibilities by classifying
> workers as ICs who legally should be considered
> employees. I won't name the company who had a
> worker on their books for year before making her
> an employee. Prior to changing her status the job
> was exactly the same. They told her when she would
> report to work at their offices and what she would
> do while she was there. While the company avoided
> the additional contributions they would be
> required to pay, she ended up paying higher taxes
> because she had no clue a lot of her expenses were
> tax deductible.

Lisa, you are so on target. Do you remember "Help Save The Mystery Shopping Industry!", as posted on Volition in 09'? That was posted by the owner of SASSIE. His proposal was that all shoppers should register at his job finding site to prove legitimacy as an IC to avoid scrutiny from the IRS. Under his post, shoppers were also urged to contact Congress in order to preserve "our" rights. Although SASSIE was a major player in the industry, shoppers were dubious, Congress was otherwise engaged and the hoped for "frenzy" fizzled. I really don't see a difference here with Market Viewpoint, despite "urgent meetings". Like in 09', I have not heard from a single MS Company on this matter. Personally, I would prefer to hear any concerns directly from the MSPA with no scheduling affiliated companies attached.

Kathy,
It goes back farther than that, long before the Obama admin!