Hatch and Employees -- or Not Employees

This was interesting to hear and rather infuriating. Senator Hatch does not pay a single campaign aide as a employee. His campaign despicably tried to disclaim culpability because some (I'm guessing imaginary) tax attorney said it is okay -- aren't you (Hatch) an attorney? Out of all of the Utah candidates he is the only one that has taken this aggressive position regarding his aides. Matheson pays everyone as an employee, while Ashdown and Cannon pays some as employees and some as subcontractors. It is reasonable to believe that certain people would be in business as political consultants, and some as office campaign staff employees. Matheson takes a very safe and conservative position, and I can appreciate Ashdown, and Cannon's employment positions. However Hatch is flouting the very laws that he has been sworn to uphold, and even more offensive the very laws that are most burdensome to the American people.

IRS and State Guidelines have a handful of simple tests.

1.) Does the boss have significant control over how and when work is finished, and are they paid passed on time not work finished? I'm guessing that there is a least one employee who is expected to show up every day and work a solid eight hours. It seems from the article that many fail this test.

2.) Is the worker free to perform the same work for other clients? This means Hatch's subcontractor campaign manager can (and should) go work for Ashdown as a aide for Hatch's argument to work. I'm guessing that the contract between Hatch and Hansen does not allow for this kind of extra work. A subcontractor has no fiduciary duty! If an aide of Hatch wants to contract with Ashdown they can take campaign secrets with them to the opposition. I'm guessing that Hatch fails here, however this maybe a opportunity for Ashdown -- Subcontract with Hatch aides.

3.) Whether there equipment is provided or they have invested in their own equipment? I have no idea on whether Hatch qualifies on this issue. For me to sign off on his aides being subcontractors, I would expect that they not only provide their own computers but also all the campaign materials they distribute. I'm guessing many of his aides would fail this test in audit as well.

4.) Whether the worker is reimbursed for expenses or whether they are responsible for expenses themselves? The article claims that financial disclosures show many reimbursements for aides expenses.

5.) From Utah DEWS: Whether or not the contractor has proper business registration and licenses? City business licenses as well as state debase. I'm guessing all fail on this point. I did a business search for Dave Hansen, Hatch's campaign manager, and I found no likely business registration for his subcontractor campaign manager.

I cannot believe that a competent tax attorney would support such a position that Hatch has taken. It is colossally unfair for Hatch to do this, it is unfair to his opponent, it is unfair to his aides who are stuck covering taxes that should have been paid by Hatch's colossally large campaign coffers.

When I have clients that come in who have had employers use this (black area) aggressive tax position usually suggest the client turn the employer in. There are four phone calls that could cost the Hatch campaign heavily in fines and interest.

Utah Labor Commission (801) 530-6800

Utah Department of Workforce Services (801) 526-WORK

Utah State Tax Commission 1-800-662-4335

IRS

It is another verification to me that Hatch needs to go. I have client who call me and ask me to tell them it is okay to call employees, subcontractors and almost always (unless the circumstances pass State and Federal guidelines) say no, it is illegal, it is unfair to your competitors, it creates large legal liabilities, etc. I'm so grateful for honest public servants like Hatch who make convincing people to follow the law because of their example so much easier. I wonder how Hatch answers in that temple interview question "Are you honest in your dealings with your fellow men?"