Cambridge Investment Research’s 1,600 financial advisors are independent contractors who run their own businesses nationwide, but legislation introduced in both the House and Senate has threatened that business model.
The legislation titled the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 would remove the safe harbor provision in Section 530 of the Revenue Act of 1978, which could force independent broker-dealers to reclassify independent financial advisors as employees, subjecting the firms to back taxes, penalties and interest. The bill was introduced to the Senate on Dec. 14, and President Obama used similar language in his proposed budget, but no action has been taken, leaving independent contractors in limbo.
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