- 13 - contractors because he could not afford employees. Respondent argues that Smith and Mawson should be considered employees of petitioner despite the parties’ understanding to the contrary. It is respondent’s position that, although petitioner informed Smith and Mawson that they were independent contractors, this is not a significant factor in the analysis because petitioner failed to file Forms 1099-MISC for either secretary to demonstrate an intent to treat Smith and Mawson as independent contractors. A contract between an employer and its staff establishing an independent contractor relationship may be set aside if the common law principles defining an employer-employee relationship dictate otherwise. See Vizcaino v. U.S. Dist. Ct. for W. Dist. of Wash. (In re Vizcaino), 173 F.3d 713, 716, 723 (9th Cir. 1999) (applying common law analysis of Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323-324 (1992), in determining worker classification). The parties’ characterization of the relationship is not controlling. See Ewens & Miller, Inc. v. Commissioner, supra at 268-269; sec. 31.3121(d)-1(a)(3), Employment Tax Regs. Petitioner did not follow consistent procedures in treating Smith and Mawson as independent contractors, namely securing an employer identification number and filing Forms 1099-MISC. The record confirms that he and his secretaries intended to avoid rules applicable to employees, but the intent was inconsistent with the reality of their relationship. (His manner of reportingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011