• In recent weeks, the NAVREF office has received an unusually large number of questions about hiring independent contractors vs. employees. Unfortunately, some of these are coming after the NPC has received an inquiry from state or federal authorities.  NPCs should be aware that the IRS 2011 Work Plan includes random audits to examine compliance with rules applicable to worker classification, fringe benefits, officer compensation and employee expense reimbursements. The IRS estimates that employee tax misreporting may be costing the government as much as $54 billion a year so it is not surprising that this area is of high interest to the IRS.

IRS guidance on hiring employees vs. independent contractors is available at http://www.irs.gov/businesses/small/article/0,,id=99921,00.html. Also, see IRS Publication 1779 (http://www.irs.gov/pub/irs-pdf/p1779.pdf).  NPCs should keep in mind that the safest course is to hire employees, not independent contractors. Also, it may be advisable to periodically review independent contractor relationships to ensure that over time they have not taken on employer/employee characteristics.
• The IRS has created a checklist for its agents to use “to capture data about governance practices and the related internal controls of organizations being examined.”  The purpose of this data collection effort is to “gain a better understanding of the intersection between governance practices and tax compliance.”  Although NAVREF sincerely hopes that no NPCs will be subject to an IRS examination, the checklist and the accompanying guidance to agents comprise a useful self assessment tool.  Because this is being used in an IRS data collection effort, the “correct” answers are not provided, but in most cases it is easy to discern the direction toward which the IRS would like to drive behavior.  For the checklist and guide, go to http://www.irs.gov/charities/article/0,,id=216068,00.html.  NAVREF encourages NPCs to spend a few minutes reviewing the 33 questions on the checklist and to use their responses to identify areas that may benefit from attention.

5. VA/DOD Collaboration Guidebook for Health Care Research

VA and DOD have created a guidebook to assist researchers and research administrators interested in DOD/VA collaborations.  To access the VA web site where the guidebook is posted, please go to http://www.research.va.gov/VA-DoD/

A recent NAVREF newsletter item contained a link to the National Health Council web site “Health Research Funding.”  Newsletter readers will recall that the purpose of this web site is to connect nonprofit funding agencies with investigators who have had projects scored, but not funded by NIH.  Investigators considering posting their abstracts should carefully read the User Agreement which states:

By posting Content to any area of HealthResearchFunding.org, you automatically grant, and you represent and warrant that you have the right to grant, to National Health Council, its affiliates, licensees, and successors, an irrevocable, perpetual, non-exclusive, fully paid, worldwide license to use, copy, perform, display, reproduce, adapt, modify, and distribute such information and content and to prepare derivative works of, or incorporate into other works, such information and content, and to grant and authorize sublicenses of the foregoing. You further represent and warrant that posting and use of your content by NHC will not infringe or violate the rights of any third party.

Apparently, concerns about confidentiality have prompted the NHC to re-evaluate the User Agreement.  Investigators may wish to contact the National NHC for an update before posting their abstracts.  Questions may be directed to healthresearchfunding@nhcouncil.org.

Thank you to Kerstin Lynam, CEO of the Veterans Medical Research Foundation in San Diego, for bringing the User Agreement to NAVREF’s attention.