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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 reporting
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