Karla, a lawyer, hired Jackson to do general clerical work for her. She maintained control over his work, gave him day-to-day instructions regarding his duties, paid him on an hourly basis, and furnished all equipment he needed. For tax purposes, Karla claimed Jackson as an independent contractor. She was audited by the IRS who took the position that Jackson was an employee. Please explain why Jackson is, or is not, an independent contractor. Also explain the effect of the IRS determination of employee or independent contractor.
What will be an ideal response?
Jackson would be considered an employee primarily because Karla controlled his daily work activities. Other factors indicating his status as an employee are his pay, the furnishing of the equipment, and the fact that he acted in his duties as a regular part of the business of Karla. When the IRS determines an independent contractor is really an employee, the employer becomes liable for all applicable taxes, such as Social Security and unemployment taxes.
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Answer the following statements true (T) or false (F)
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