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by midniteslayr 4032 days ago
Not an IRS Rule, but it is something bigger companies want to implement so they don't have to pay for benefits for the contractor. When googling it, most I come up with is that most big companies don't want to make it look like they are using temporary work in place of a permanent employ.

(I can't believe I'm linking a Yahoo! Answers post about it, but it's the best that I can find quickly: https://answers.yahoo.com/question/index?qid=20070308162652A...)