I am an appliance sales person and was employed by a company that allowed us to file SPIFF from the manufacturer. In 2018 I filed approx $75,000 in SPIFF. Because it was such a large amount, the IRS is saying that I was self employed, and am subject to pay Self Employment Tax. I have been fighting this for 5 years now. They told me to explain why I felt I am not subject to SET. I sent them all my 1099 MISC with all the amounts in Box 3 (not Box 7) and they basically said that was not a good enough reason. Because this has gone on so long it's ballooned into a $17000 payment that I am not convinced I need to make. They are allowing me one more opportunity to plead my case. They want me to send information on how I get paid and what SPIFF's are. Is there any documentation I can include by the IRS that says SPIFF are not subject to self employment tax.
When I discussed it with someone from the IRS over the phone I was told that the amount raised a red flag, basically saying because I made so much in SPIFF, I must be self employed. My employment has never changed in 10 years. I have been paid the same way.
Note: I understand that SPIFF are taxable, I paid State and Federal Taxes. I am not debating whether they are taxable or not, I need proof to show the IRS that this income is not subject to Self Employment Tax.
Thank You
