Inside Report (2)

Is the Avon lady more powerful than the mighty IRS? The Internal Revenue Service has been trying to impose tax withholding on the nation's 4 to 8 million "independent contractors." These are mostly direct salespeople who are exempt from the withholding law.

The pullback appears political. Those contractors are, after all, very good at selling things, and the administration doesn't want them angry enough to go pounding on doors to sell Reagan and Anderson to the American public in the next few weeks.

Barring a last-minute deal on the proposal in hearings Sept. 16-19, the idea is expected to be put on "hold" for at least another year.m