Question

The following article below answer the following question:

A- What is the Article About it, and how it relates to the class?

B- Do you Agree or Disagree with the author?

C- Explain why do you Agree or Disagree.

NOTE:Support your response with reference or laws

article

In Information Letter 2012-0069, the IRS addressed whether a person can be an employee and an independent contractor at the same time while working for the same company. The person was working as a professional consultant on two separate consulting projects. The IRS concluded that each project should be examined separately, meaning that the same person could have a different status for each project.

In making a determination on whether a worker is an employee or independent contractor, the IRS is most concerned with federal withholding and payment of employment taxes. Code §3 121(d)(2) defines an employee as any individual who, under the common law rules applicable in determining the employer-employee relationship, has the status of an employee. Whether an individual is an employee under the common law rules is a question of fact to be determined after considering the facts and circumstances in a particular case.

The relationship of employer-employee generally exists when the employer has the right to direct and control the person not only as to the result to be accomplished by the work, but also as to the details and means by which that result is accomplished. The employer does not necessarily have to actually direct or control the manner in which the services are performed; it is sufficient if he or she has the right to do so. The designation or description of the relationship by the parties as anything other than that of employer and employee is generally immaterial.

In making the determination, the IRS will consider all evidence of control or autonomy. Relevant facts generally fall into three categories of evidence: behavioral controls, financial controls, and the relationship of the parties. Behavioral controls generally refer to the right to direct or control the work. Financial controls generally refer to whether the person can control the financial aspects of work. The relationship factor refers to the parties' agreement and how their relationship is represented to others.

If an individual provides services in two separate roles to the same business, the IRS separately examines the relationship between the worker and the business for each performance of services. Just as with any examination of worker status, the IRS will examine each relationship based on factors that fall into the three categories set forth above - behavioral controls, financial controls, and relationship of the parties. If an employer-employee relationship is found with regard to performance of services for only one role of the worker, remuneration with regard to only those specific services is subject to all FICA and income tax withholding requirements.

The IRS also noted that a business may file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, to request an IRS determination of the status of a worker. The request may cover a class of workers, an employee or an independent contractor. If the firm is requesting a determination for a particular class of worker, it should complete the form for one individual who represents the class whose status is in question.

Information Letter 2012-0069 is interesting because it clarifies that it is possible to have more than one status with the same employer. Although any determination will be fact-specific, it might still be rare that an employee could, for certain tasks, be considered an independent contractor.

For more information regarding employee or independent contractor status, see 391 T.M., Employment Status - Employee v. Independent Contractor.

Answer 1

A- This article is about Information Letter 2012-0069 issued by IRS addresing a inquiry that " Whether a person can be treated as a employee and independent contractor for the same company simultaneously ,when working on a two seperate projects as a professional consultant."

B- yes, I m in agreement with the Author.

C. Reasons for Agreement with the Author:

- It is true that a employer is under the obligation to pay empolyee federal taxes if, he cosiders a worker as employee. So, IRS would be most concerned with the payment of taxes.and want worker to be consider as employee.

- To decide whether a worker is an employee or not code section 3121(d) (2) defines the term "employee" . An employee is an individual who is under the common law applicable is considered as an employee.

- Section 31.3121(d)-1(c)(2) of the regulations provides that the relationship of employer and employee exist when employer is able to control the work of the individual ie. not only the result but also the process to achieve such result. The right to control such process is enough to establish the relationship of employee and employer.

- Further, while deciding a woker is an employee or independent contractor we must check the evidence of control, which can further be divided into : Behavioural Control, Financial Controls and the relationship of parties.

-Behavioural controls are whether worker has the right to perform the task by himself or he is reuired to take instructions from the service receipient.

-Financial Controls are whether service receipient control the financial aspects of the projects completely or not.

-The relationships of parties are generally decided by the agrrement or contracts they have entered into.

-So, if such relationship exists , employer will be liable to pay FICA and consider the woorker as employee.

- If such relationship cannt be establish, than the worker will be treated as an independent contractor.