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Mary Ann Recor

Last modified: 2011-09-08


The issue of distinguishing between an Independent Contractor and an Employee is an important one.  The proper classification affects both the party doing the hiring and the party providing the labor.  The consequences of the classification can have an effect, most importantly, on tax payments as well as benefits.  Accordingly, proper classification has been an ongoing battle between the Internal Revenue Service (IRS) and taxpayers. 

The purpose of this paper is to:

·         State the importance for proper classification

·         Illustrate some of the progress made in this area

·         List, define and explain the current rules

·         Observe how current rules are applied to current cases

·         Analyze the outcome of litigation based upon the rules in effect  

Research for this paper includes but is not limited to the use of the Internal Revenue Code, the Treasury Regulations, and Court Cases.  The summation of this paper should provide the best techniques currently available to avoid problematic issues with the Internal Revenue Service.


independent contractor, employee, taxation, IRC