Stack was a software engineer and quite upset with the IRS over how software engineers or any contracted engineers are taxed. He quotes Section 1706 of the 1986 Tax Reform Act in his letter.
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:
"(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work."
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.
Note:
* "another person" is the client in the traditional job-shop relationship.
* "taxpayer" is the recruiter, broker, agency, or job shop.
* "individual", "employee", or "worker" is you.
He was also disappointed by his earnings in Texas compared to California. He blamed the difference in pay on there being less companies hiring engineers like him. Well, Joe, there is less call for your type of work here. That's why there are fewer companies. You should have checked into that first. The cost of living here is also a generally lower.
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Paddle or die!
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