Tax file

There reportedly has been a big drop in audits by the Internal Revenue Service in recent years, particularly regarding challenges to companies classifying workers as independent contractors. But there are still times the IRS gets its “Day” in court. In this case, the Tax Court sided with the IRS and against Robert Day, owner of Dayline Trucking (Robert Day v. Commissioner, Tax Court Memorandum 2000-375). Day had treated his drivers as independent contractors, claiming he followed a longstanding recognized industry practice, even though he exercised close control and the drivers had no significant investment in their jobs. The Court did not buy Day's line, ruling that he had misclassified the drivers and had no reasonable basis for doing so.