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    Taxation: Factors for employee vs self-employed contractor

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    As a Revenue Agent at the IRS, we were trained to look for contract labor payments in order to verify that the payments were not to employees If it is shown the subcontractors were actually employees it would result in a substantial tax and penalties.

    What are the factors used to determine that a service provider is an employee versus a self-employed contractor?

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    Solution Preview

    Some of the facts and circumstances that will convince an IRS agent that labor payments should not be payroll include:

    1. Does the contractor make his own decisions about how to perform the work?
    2. Does the ...

    Solution Summary

    The solution presents six questions that can be used to help determine self employed status.