Thank you for your response, it has given me a lot to think about.

Right, I would like to see the IRS change the Statutory Employee provisions to include loan originators.  Their contract classifies them as an "outside salesperson", and it is very close to the definition, but not quite.

The cases you referred to are included in the ones I have researched, but I was hoping for something more recent.  That information on day-traders is good to know.  I've never had one who didn't have other income besides day trading included on the Sch C, so it didn't look wrong.  

I will look in to that salary reduction plan to fund a spending account suggestion, thanks.

Doubtful that this particular employer would go for the LLC or corporation route for their employee, not sophisticated enough to follow that through, I fear.

Ironic that the Dept of Labor is coming down hard on the employee vs independent contractor definitions when another federal law has dictated that these must be employees or they will not allow them to participate in the federally-guaranteed loan market.

Thanks again, this was most helpful!