According to Andrew McIlvaine,

“desperate for revenue, state and federal officials are increasingly looking at the potential mis-classification of employees as independent contractors.”

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Here is the checklist the IRS Uses to audit for independent contractors:

Behavioral Control/Instructions -

1) Telling how, when, or where to do work.

2) Telling what tools or equipment to use.

3) Telling what assistants to hire to help with the work.

4) Evaluation systems of independent contractors.

5) Telling where to purchase supplies and services.

Training -

1) Requiring training by company and requiring certain procedures and methods to be used on the jobs.

Financial Control -

1) Significant investment on the part of the independent contractor.

2) Not reimbursed for business expenses by employer.

3) Independent contractor must prove profit or loss.

Relationship to the parties -

1) Provide benefits insurance, pension or paid leave.

2) Written contracts for contractors, permanency of the relationship, and services provided as key activity to the business.

Call 817-343-0066 for a free telephone consultation to discuss Human Resources at your company.