I`m not a tax person either, but we ran a business once where others in the same business (sales agents for a large office equipment company) tried to pay their sales people as contractors and got smacked by the IRS. There are some VERY specific rules that must be carefully followed. We also looked at a lawsuit against this company ourselves because while they considered us to be independent contractors, they were violating quite a few of the IRS rules in that they were attempting to exert direct control over our business activities (such as how many sales people we HAD to have) and control the hours we worked and how we ran our business.
I`m with Craig, I`m sure the tax people will weigh in. But, I just know enough to know that you need to be very careful because if you get caught in that trap, you will lose your shirt.