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May 12, 2010
Internal Revenue Service Test to Determine Independent Contractor Classification

Maria Anastas discussed various independent contractor classification tests in a BLR webinar entitled ‘Employee versus Independent Contractor: Where’s the Line? How to Make the Proper Call and Stay Out of Court’. She states that one of the tests that can be used to classify individuals working in an organization is the Internal Revenue Service (IRS) test. The IRS recently revised their guidelines for analyzing worker classification issues as follows:

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  • Because of the difficulty in applying the 20-factor test and because business trends have changed over the years, the Service has recently begun using a new approach with respect to worker classification
  • Rather than listing items of evidence under the 20 factors, the approach now is to group the items of evidence into three main categories
  • These three categories are behavioral control, financial control and the type of relationship between the parties

Maria Anastas is a partner in the San Francisco office of law firm Ogletree, Deakins, Nash, Smoak & Stewart, PC (www.ogletreedeakins.com ). She represents employers in labor and employment law matters exclusively, with a primary emphasis on traditional labor matters. She can be reached at maria.anastas@ogletreedeakins.com.

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