Internal Revenue Code · 26 U.S.C.

§ 3508. Treatment of real estate agents and direct sellers

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 3508

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: September 3, 1982 by Pub. L. 97–248
Last amended: August 20, 1996 by Pub. L. 104–188
Amendments: 1 dated changes in the source credit
Length: 2 subsections · 465 words · about 2 min to read
Defines: 2 terms
Cross-references: cites 1; cited by 0 Code sections and 2 other regulations

¶(a) General rule For purposes of this title, in the case of services performed as a qualified real estate agent or as a direct seller—

¶(1) the individual performing such services shall not be treated as an employee, and

¶(2) the person for whom such services are performed shall not be treated as an employer.

¶(b) Definitions For purposes of this section—

¶(1) Qualified real estate agent The term “qualified real estate agent” means any individual who is a sales person if—

¶(A) such individual is a licensed real estate agent,

¶(B) substantially all of the remuneration (whether or not paid in cash) for the services performed by such individual as a real estate agent is directly related to sales or other output (including the performance of services) rather than to the number of hours worked, and

¶(C) the services performed by the individual are performed pursuant to a written contract between such individual and the person for whom the services are performed and such contract provides that the individual will not be treated as an employee with respect to such services for Federal tax purposes.

¶(2) Direct seller The term “direct seller” means any person if—

¶(A) such person—

¶(i) is engaged in the trade or business of selling (or soliciting the sale of) consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis which the Secretary prescribes by regulations, for resale (by the buyer or any other person) in the home or otherwise than in a permanent retail establishment,

¶(ii) is engaged in the trade or business of selling (or soliciting the sale of) consumer products in the home or otherwise than in a permanent retail establishment, or

¶(iii) is engaged in the trade or business of the delivering or distribution of newspapers or shopping news (including any services directly related to such trade or business),

¶(B) substantially all the remuneration (whether or not paid in cash) for the performance of the services described in subparagraph (A) is directly related to sales or other output (including the performance of services) rather than to the number of hours worked, and

¶(C) the services performed by the person are performed pursuant to a written contract between such person and the person for whom the services are performed and such contract provides that the person will not be treated as an employee with respect to such services for Federal tax purposes.

¶(3) Coordination with retirement plans for self-employed

This section shall not apply for purposes of subtitle A to the extent that the individual is treated as an employee under section 401(c)(1) (relating to self-employed individuals).

(Added Pub. L. 97–248, title II, § 269(a), Sept. 3, 1982, 96 Stat. 551; amended Pub. L. 104–188, title I, § 1118(a), Aug. 20, 1996, 110 Stat. 1764.)

Terms defined here

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direct seller § 3508(b)(2)
qualified real estate agent § 3508(b)(1)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

§ 401(c)(1) Qualified pension, profit-sharing, and stock bonus plans

Cited in 2 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

August 20, 1996Amended by Pub. L. 104–188Parts changed in 1996: (b)(2)(A)
September 3, 1982Added by Pub. L. 97–248

Where it sits in the Code

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

1996—Subsec. (b)(2)(A). Pub. L. 104–188 added cl. (iii).

Effective Date of 1996 Amendment

Pub. L. 104–188, title XI, § 1118(b), Aug. 20, 1996, 110 Stat. 1764, provided that: “The amendments made by this section shall apply to services performed after December 31, 1995.”

Effective Date

Pub. L. 97–248, title II, § 269(e), Sept. 3, 1982, 96 Stat. 553, provided that:

“(1) In general.— Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending section 410 of Title 42, The Public Health and Welfare] shall apply to services performed after December 31, 1982.

“(2) Subsection (c).— The amendments made by subsection (c) [amending provisions set out as a note under section 3401 of this title] shall take effect on July 1, 1982.”

Rules and Regulations

Pub. L. 97–248, title II, § 269(c)(3), Sept. 3, 1982, 96 Stat. 553, provided that: “Nothing in section 530 of the Revenue Act of 1978 [set out as a note under section 3401 of this title] shall be construed to prohibit the implementation of the amendments made by this section [enacting this section, amending section 410 of Title 42, The Public Health and Welfare, and amending provisions set out as a note under section 3401 of this title].”