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1. Relationship the Parties Thought They Created
Petitioner and Ms. D’Acunto presented conflicting testimony
in regard to petitioner’s work relationship during the disputed
pay period. Ms. D’Acunto testified that New Dimensions and
petitioner agreed to change petitioner’s status from employee to
independent contractor during the disputed pay period. As we
discussed above, we decline to accept petitioner’s testimony
that he was completely unaware of any changes in the terms of
his relationship with New Dimensions. The evidence in this case
clearly shows that significant changes occurred in the parties’
relationship, and these changes are consistent with petitioner
becoming an independent contractor. Petitioner’s paychecks
ceased to include pay stubs indicating the withholding of taxes,
and the change in petitioner’s paychecks is consistent with the
loss of benefits and changes in the manner in which the company
conducted its business. We are convinced that the parties
intended to create an independent contractor relationship for
petitioner for the disputed pay period, and we believe this
factor is of great significance.
2. Degree of Control
In many cases, the principal’s degree of control over the
details of a taxpayer’s work is the most important factor in
determining whether an employee relationship exists. Matthews
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Last modified: May 25, 2011