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IRS and common Law test – Employee vs. Independent Contractor

Employee vs. Independent Contractor

IRS and common Law test - Employee vs. Independent Contractor

Image courtesy of [David Castillo Dominici] / FreeDigitalPhotos.net

Issue In the situations described below, are the individuals employees under the common law rules for purposes of the Federal Insurance Contributions Act (FICA), the federal unemployment tax act (FUTA), and the Collection of Income Tax at Source on Wages (chapters 21, 23, and 24 respectively, subtitle C, Internal Revenue Code)? These situations illustrate the application of section 530(d) of the Revenue Act of 1978, 1978-3 )Vol. 1_ C.B. 119 (the 1978 Act, Which was added by sections 1706(a) of the Tax Reform Act of 1986, 1986-3 (Vol. 1) C.B. 698 (the 1986 Act) (generally effective for services performed and remuneration paid after December 31, 1986).

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