The significance of independence, however, came much later during my early years
of college; at the age of 18 or 19 when I was living on my own as student in an
apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman
(80+ seemed ancient to me at that age) who was the widowed wife of a retired steel
worker. Her husband had worked all his life in the steel mills of central Pennsylvania
with promises from big business and the union that, for his 30 years of service, he
would have a pension and medical care to look forward to in his retirement. Instead
he was one of the thousands who got nothing because the incompetent mill
management and corrupt union (not to mention the government) raided their pension
funds and stole their retirement. All she had was social security to live on.
In retrospect, the situation was laughable because here I was living on peanut butter
and bread (or Ritz crackers when I could afford to splurge) for months at a time.
When I got to know this poor figure and heard her story I felt worse for her plight
When I got to know this poor figure and heard her story I felt worse for her plight
than for my own (I, after all, I thought I had everything to in front of me). I was
genuinely appalled at one point, as we exchanged stories and commiserated with
each other over our situations, when she in her grandmotherly fashion tried to
convince me that I would be “healthier” eating cat food (like her) rather than trying to
get all my substance from peanut butter and bread. I couldn’t quite go there, but the
impression was made. I decided that I didn’t trust big business to take care of me,
and that I would take responsibility for my own future and myself.
Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-theears’
contract software engineer... and two years later, thanks to the fine backroom,
midnight effort by the sleazy executives of Arthur Andersen (the very same folks who
later brought us Enron and other such calamities) and an equally sleazy New York
Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its
section 1706.
For you who are unfamiliar, here is the core text of the IRS Section 1706, defining
the treatment of workers (such as contract engineers) for tax purposes. Visit this link
for a conference committee report
(http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding
the intended interpretation of Section 1706 and the relevant parts of Section 530, as
amended. For information on how these laws affect technical services workers and
their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding
at the end thereof the following new subsection:
(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.
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to
remuneration paid and services rendered after December 31, 1986.