- 17 -
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).
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011