Contractor Law

Some tax issues exist when outsourcing work. The IRS criteria for determining whether someone should be treated as an external contractor or as an employee has been applied inconsistently. You may be found liable for back taxes and penalties as a company if you treat an external contractor as an employee. Here are some of the criteria used by the IRS to determine whether a person should be treated as an external contractor or as an employee.

According to IRS guidelines, the criteria used for determining whether a contractor is being treated as an employee include the amount of instruction required, who pays for the training, the integration of the work, the services rendered, hiring, supervising and paying assistants, length of ...

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