Excellent posting By GreenTraderTax: If some of these prop. agreements are indeed structured as stated then even though there is a type of employment agreement, I would be surprised that the IRS would allow such individuals to be considered employees under careful review of the firms operating structure. If there are firms truly operating like this then it seems to me that - I am not a tax expert mind you - they would be taking a bit of a risk for this type of tax treatment. It would be interesting to research the IRS case law on these types of questions ...... Can anyone cite examples ?