An Odd Time Clock At Time Inc.

Two agencies are investigating its use of contract workers

In 1993, after working full-time at Sports Illustrated for eight years as a contract writer, Kristina Rebelo was let go. That was soon among the least of her problems. Not long after, the Internal Revenue Service notified Rebelo that she had not been an independent contractor after all. In the IRS's view, the nature of Rebelo's job--she had no other clients and reported to SI almost daily--meant that she actually had been an employee. It was more than a semantic distinction: Forced to refile three years of tax returns--and with her self-employment expense deductions disallowed--Rebelo faced a five-figure bill for back taxes.

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