Robert C. and Patricia C. Humphrey - Page 17

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               also an important factor indicating that the person                    
               possessing that right is an employer. Other factors                    
               characteristic of an employer, but not necessarily                     
               present in every case, are the furnishing of tools and                 
               the furnishing of a place to work to the individual who                
               performs the services. In general, if an individual is                 
               subject to the control or direction of another merely                  
               as to the result to be accomplished by the work and not                
               as to the means and methods for accomplishing the                      
               result, he is not an employee.                                         
               In United States v. W.M. Webb, Inc., 397 U.S. 179, 194                 
          (1970), the Supreme Court stated with respect to section                    
          31.3121(d)-1(c)(2), Employment Tax Regs., which has language                
          almost identical to section 31.3401(c)-1(b), that “the regulation           
          provides a summary of the principles of the common law, intended            
          as an initial guide for determination * * * [of] whether a                  
          relationship ‘is the legal relationship of employer and                     
          employee.’”  The regulations applicable to this case, section               
          31.3401(c)-1(b), Employment Tax Regs., adopt the common law test            
          for purposes of determining when an employee-employer                       
          relationship exists.17  Taylor v. Commissioner, 71 T.C. 124, 127            
          (1978).                                                                     
               Whether an individual is a common law employee is a question           
          of fact,18 to be determined applying the following factors:  (1)            
          The degree of control exercised by the principal; (2) which party           


               17 An exception to the common law test may apply in                    
          situations involving leaves of absence.  See sec. 1.421-7(h)(2),            
          Income Tax Regs.                                                            
               18 Ellison v. Commissioner, 55 T.C. 142, 152 (1970).                   





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