Academy of Chiropractic
Quickie Podcast 1234
Office Systems 122 OS
Preamble: Many of the issues I bring to you are very small, yet each issue is just that, an issue. If you take care of the small issues, then you will be able to build and more importantly, focus on the bigger issues...a larger practice and more family time. -Mark Studin 2006
"Fixing an Old Case"
Dr Studin: This conversation is going to be about independent contractors, so your current associate is under a 1099. Is that correct?
Dr Studin: do you make appointments for that person?
Guest: the office does mostly administration. I do, yes.
Dr Studin: So the answer was yes. And she sees patients in your facility, which is in your appointment book, correct?
Guest : Correct.
Dr Studin: I'm sitting here with Maurice Manor who's an accountant. Maurice, How many chiropractors or doctors do you represent right now? Roughly?
Accountant: Probably about 25 to 30.
Dr Studin: all over the country And out of those they're mostly our clients, could you explain a little bit about the status right now of the IRS with independent contractors?
Accountant: The problem with the IRS is that designed to actively go after this in New Jersey and California, the States have passed laws basically limiting who can be an independent contractor. The IRS has a whole bunch of things that have to be looked at California has made it even more stringent. If you have control over this person and the person is working for you and no one else, you got a problem, that person is now your employee no matter what.
Dr Studin: Beyond that, we have a relationship with one of the nation's leading labor lawyers and I mean that sincerely, he represented the largest labor local in the world. And we talked about this and he said the courts all over the country, a very stringent, especially with doctors, and he represents many doctors as well. So if you start to get busier, And then the carriers, especially PI carriers, they're going to look for a wedge. They're going to look for something and they're going to want your tax records. They're entitled to it or they're going to get an associates. Whoever touches a patient is, is fodder, whether it be personal injury, managed care, and the people who Sue the most actually are cash patients. I guess they have no one to complain to, They don't have a carrier or they have the licensure board. you have someone who you're making appointments with who, how has been your location that and have set hours that in itself disqualifies you from being a 1099. That’s really a W2. The federal government sees that as a way to defraud, paying, matching, FICA. here's the thing, it's going to always go back to this concept. And this is a flag, Everything you do is fair game right now, they're going to come in and potentially look at the status of your last independent contractor, which you have a problem with, You don't give your associates on unrestricted acess to the program. But there's no way from my perspective how somebody could be a 1099, no way. If you ever locum, except if there are locums tenants on probation, that’s fine, that's vacation. Other than that no.
Accountant: as long as they don't work in your office. If you're sending them to somebody else to do some work, you might get away with it. But if that person spends time in your office.
Dr Studin: but even the thing, you might get away with it. We don't want to live in that world. Black and white.
Accountant: Let's see, you have a radiologist. You send the person to radiologist and you send somebody to something else, right? The person who is going to see your patient, but you're going to pay for it.
Dr Studin: That rarely happens in our world. So let's about come up with the except, but not in the chiropractor's world. So is a rule. You got it.
Guest Dr: Got it. there's nothing I can do to clean up before, so I just have to deal with that one.
Dr Studin: Is there anything you'd do to clean it up?
Accountant: Well, here's the thing with the IRS, as long as you change over and date that person, an employee, the IRS has accommodations that you can say to them, listen to the section 530 of the code. Listen, I was wrong. I fixed it, and now we're going to go forward as an employee and they'll leave you alone.
Dr Studin: But about the old guy, probably not the person that was working there, and again, and I recommend to every one of our clients and you as one, we'll have this conversation. We've not yet done our compliance review. We talk about these things.