Yes, corps are afraid to stop withholding because the forms they receive make them think there's a federal nexus and everyone else does it that way, and that means they don't offer their "employees" real means to challenge the nexus directly; and most workers aren't in a position to do so. A few have enough negotiation leeway to as for contract work. But even if a workplace thinks your earnings are income you still have the power to read the laws for yourself and rebut incorrect presumptions.