IRS Information for Direct Sellers

The IRS has posted a video webinar for direct sellers to help determine if the seller meets the 9 tests under the Treasury Regulations for being in a trade or business.

If you are wondering if you are a direct seller, here is what the IRS has to say:

Direct sellers include any of the following:

  • A person who sells consumer products in the home or a place of business other than a permanent retail establishment,
  • A person who sells consumer products on a deposit or commission basis, or to other persons who will sell the products in the home or place of
  • A person who delivers and/or distributes newspapers or shopping guides.

Direct sellers have certain things in common. Their compensation is related to sales rather than to the number of hours worked. Services are performed under a written contract between the seller and the person for whom the seller performs the services.  And the contracts involved provide that sellers are not treated as employees for federal tax purposes.