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These common-law rules take into account the following
factors: (1) The degree of control exercised by the principal,
(2) which party invests in work facilities used by the
individual, (3) the opportunity of the individual for profit or
loss, (4) whether the principal can discharge the individual,
(5) whether the work is part of the principal's regular business,
(6) the permanency of the relationship, and (7) the relationship
the parties believed they were creating. See Weber v.
Commissioner, 103 T.C. 378, 387 (1994), affd. per curiam 60 F.3d
1104 (4th Cir. 1995). No single factor dictates the outcome.
All the facts and circumstances should be considered. See id.
In this case, the Kentucky Unemployment Insurance
Commission applied the above factors and found that the services
performed by petitioner for the DOI were performed as an
independent contractor. After examining all the facts and
circumstances in this case, we agree with the Commission’s
determination and find that, for purposes of section 62,
petitioner was an independent contractor during the years in
issue. Accordingly, petitioner’s allowable business expense
deductions, as set forth above, are properly deducted on a
Schedule C.
Reviewed and adopted as the report of the Small Tax Case
Division.
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