Federal Tax

Employment Status — Employee v. Independent Contractor (Portfolio 391)

  • This Portfolio describes in detail who an “employee” for federal employment tax purposes is and explains the differing tax treatment of employees and independent contractors.

Description

Tax Portfolio, Employment Status — Employee v. Independent Contractor, No. 391, describes in detail who is “employee” for federal employment tax purposes is and emphasizes the controversial difference between “employee” and independent contractor. Defining the “employee” requires an examination of both the applicable common law factors and any special statutory provisions in the area.

This Portfolio examines the definition of employee, as well as the definition of wages and of employer for federal employment tax purposes. Since the authorities do not form a cohesive whole, each occupation is also examined separately under the common law rules and — when applicable — under the special statutory rules. Attempted statutory solutions to this controversial area have been examined in particular detail, both as to their applicability as well as their effectiveness.

Table of Contents

I. Statutory Provisions Involved
II. Pertinent Indicators
III. Identifying Wages
IV. Identifying Employment
V. Analysis of Authorities by Occupation
VI. Special Situations
VII. Employment Tax Litigation Considerations

Helen Marmoll
Helen Marmoll
Tax Management Portfolio Authors
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