Our agency has always treated its sales agents as 1099 Independent Contractors. The owner, however, has always said that if the IRS were to audit they might disallow this practice based on the agent contract that states the agent will only write business with our agency.
A CPA recently brought to our attention the IRS Voluntary Classification Settlement Program (VCSP) http://www.irs.gov/businesses/small/article/0,,id=246013,00.html
He recommends that we participate in the VCSP as a good opportunity to "change our ways" and classify the sales agents as employees now. This would be very hard for the agents because we would have to change their contract paying a lower commission % to compensate for the increased tax burden.
Have any other agencies considered this program? How does your agency handle the matter of commission only agents? What steps does your agency take to solidify that relationship? All other applicable thoughts welcomed.