Independent broker-dealers may have to reclassify independent FA’s as “employees” if the “Taxpayer Responsibility, Accountability and Consistency Act of 2009” is passed by Congress.
Not only would this affect the livelihood of over 178, 000 registered reps, but it could lead to high costs including back taxes, penalties and interest for the independent broker-dealers. For over three decades, the reps, classified as independent contractors, have been in compliance with applicable rules and have met all required regulations of the IRS.
The proposed legislation was drafted to correct abuses in independent contractor classification, but unfortunately, the financial advisory community would get caught up in the unintended consequences. Let’s hope that the legislation is modified to protect the independent advisor status, assuring that their rights and the business model under which they operate are ensured! Write your Congressman!!
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How much more legislation can they put on one person ? I think this would be a shame for all those who are truly “independent” and do a great job.
Yes! This is just more legislation. And I think it’s not going to do any good to the FA’s.