My argument would be that the IRS should not care if you are an “independent contractor” or employee since they get the tax money anyway - either from the individual “independent contractors” or the employer. I realize that they are inforcing the “law”, but in my opinion the law is wrong. Their problem is that if each of the “independent contractors” is a tax cheat, they have a lot more collection actions to take.
Yes, another such arbitrary designation into the degraded human condition of “employee” is a BIG reason off-shoring seems economic to businesses such as Boeing (http://www.freerepublic.com/focus/f-news/1943442/posts).
An engineer or knowledge-worker at a workstation costs a company a big money premium (maybe 33% plus) when designated as an employee. The IRS makes damn sure we US citizens can’t compete as individuals, and are way too overpriced as “employees”.