Employee vs. Independent Contractor
Today we will take a brief look at the old question: Are they an employee or an independent contractor?
This question continues to be a priority for the IRS. There is a form (SS-8) that an employer or employee can fill out and file with the IRS to determine the status of a worker for purposes of Federal Employment Taxes and Income Tax Withholding. There is no fee for requesting a Form SS-8 determination letter.
The IRS recently released new draft instructions for this form. They added the following statement to the instructions:
Generally, under the common law rules a worker is an employee if the firm has the right to control what will be done and how it will be done.
It does not matter what title you give to a worker. It also doesn't matter whether they work full time or part time. That new statement could be very important as it clearly addresses the IRS’s position.
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