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Security, FICA, and Federal and State income taxes on the
payments.
Petitioners filed a timely 1997 joint Federal income tax
return. The taxable income reported on the return takes into
account their election to itemize deductions. Income and
deductions attributable to petitioner’s teaching assignments are
reported on a Schedule C, Profit or Loss From Business, included
with that return.
The adjustments made in the notice of deficiency reflect
respondent’s determination that in 1997 petitioner performed
services for the universities as an employee, not as an
independent contractor.
Discussion
Whether an individual is an employee or an independent
contractor for Federal income tax purposes is a factual question
to be determined with reference to common-law principles of
agency. See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318,
322-325 (1992); Weber v. Commissioner, 103 T.C. 378, 386 (1994),
affd. 60 F.3d 1104 (4th Cir. 1995); Professional & Executive
Leasing, Inc. v. Commissioner, 89 T.C. 225, 232 (1987), affd. 862
F.2d 751 (9th Cir. 1988). The relevant factors in determining
the characterization of an employment relationship include:
(1) The degree of control exercised by the principal over the
details of the work; (2) which party invests in the facilities
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