
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC3508]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                      Subtitle C--Employment Taxes
 
       CHAPTER 25--GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES
 
Sec. 3508. Treatment of real estate agents and direct sellers


(a) General rule

    For purposes of this title, in the case of services performed as a 
qualified real estate agent or as a direct seller--
        (1) the individual performing such services shall not be treated 
    as an employee, and
        (2) the person for whom such services are performed shall not be 
    treated as an employer.

(b) Definitions

    For purposes of this section--

                   (1) Qualified real estate agent

        The term ``qualified real estate agent'' means any individual 
    who is a sales person if--
            (A) such individual is a licensed real estate agent,
            (B) substantially all of the remuneration (whether or not 
        paid in cash) for the services performed by such individual as a 
        real estate agent is directly related to sales or other output 
        (including the performance of services) rather than to the 
        number of hours worked, and
            (C) the services performed by the individual are performed 
        pursuant to a written contract between such individual and the 
        person for whom the services are performed and such contract 
        provides that the individual will not be treated as an employee 
        with respect to such services for Federal tax purposes.

                          (2) Direct seller

        The term ``direct seller'' means any person if--
            (A) such person--
                (i) is engaged in the trade or business of selling (or 
            soliciting the sale of) consumer products to any buyer on a 
            buy-sell basis, a deposit-commission basis, or any similar 
            basis which the Secretary prescribes by regulations, for 
            resale (by the buyer or any other person) in the home or 
            otherwise than in a permanent retail establishment,
                (ii) is engaged in the trade or business of selling (or 
            soliciting the sale of) consumer products in the home or 
            otherwise than in a permanent retail establishment, or
                (iii) is engaged in the trade or business of the 
            delivering or distribution of newspapers or shopping news 
            (including any services directly related to such trade or 
            business),

            (B) substantially all the remuneration (whether or not paid 
        in cash) for the performance of the services described in 
        subparagraph (A) is directly related to sales or other output 
        (including the performance of services) rather than to the 
        number of hours worked, and
            (C) the services performed by the person are performed 
        pursuant to a written contract between such person and the 
        person for whom the services are performed and such contract 
        provides that the person will not be treated as an employee with 
        respect to such services for Federal tax purposes.

       (3) Coordination with retirement plans for selfemployed

        This section shall not apply for purposes of subtitle A to the 
    extent that the individual is treated as an employee under section 
    401(c)(1) (relating to self-employed individuals).

(Added Pub. L. 97-248, title II, Sec. 269(a), Sept. 3, 1982, 96 Stat. 
551; amended Pub. L. 104-188, title I, Sec. 1118(a), Aug. 20, 1996, 110 
Stat. 1764.)


                               Amendments

    1996--Subsec. (b)(2)(A). Pub. L. 104-188 added cl. (iii).


                    Effective Date of 1996 Amendment

    Section 1118(b) of Pub. L. 104-188 provided that: ``The amendments 
made by this section shall apply to services performed after December 
31, 1995.''


                             Effective Date

    Section 269(e) of Pub. L. 97-248 provided that:
    ``(1) In general.--Except as provided in paragraph (2), the 
amendments made by this section [enacting this section and amending 
section 410 of Title 42, The Public Health and Welfare] shall apply to 
services performed after December 31, 1982.
    ``(2) Subsection (c).--The amendments made by subsection (c) 
[amending provisions set out as a note under section 3401 of this title] 
shall take effect on July 1, 1982.''


                          Rules and Regulations

    Section 269(c)(3) of Pub. L. 97-248 provided that: ``Nothing in 
section 530 of the Revenue Act of 1978 [set out as a note under section 
3401 of this title] shall be construed to prohibit the implementation of 
the amendments made by this section [enacting this section, amending 
section 410 of Title 42, The Public Health and Welfare, and amending 
provisions set out as a note under section 3401 of this title].''

                  Section Referred to in Other Sections

    This section is referred to in title 42 section 410.
