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Tax Highlighter

Employee or Independent Contractor?

Employee or independent contractor? When a court must decide how workers are to be classified, it looks at various factors. In one case, the U.S. Tax Court found that a provider of private duty nurses failed to classify 99 nurses as employees during 2016–2018. The factors considered included: the degree of control the company exercised over the work; the ability of the nurses to affect their own profit or loss; the investment of the nurses compared to that of the company; the permanency of the relationship; and the skills required to perform the job. Based on the court’s conclusion, the company was held liable for federal employment taxes and other taxes and penalties. (TC Memo 2022-35)

Posted April 18, 2022



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