- 13 -
Self-employment income is defined as net earnings from self-
employment. Sec. 1402(b). “Net earnings from self-employment”
is defined as “gross income derived by an individual from any
trade or business carried on by such individual”. Sec. 1402(a).
In general, services performed as an independent contractor
give rise to self-employment income. See sec. 1402(c)(2)
and (3); Jackson v. Commissioner, supra at 133-134.
Generally, a taxpayer who works for another but who controls
the means and methods for accomplishing the work is treated as an
independent contractor. Secs. 31.3121(d)-1(c)(2),
31.3306(i)-1(b), Employment Tax Regs.
In deciding whether a taxpayer is to be treated as an
independent contractor or as an employee, we apply seven factors
(see, e.g., Ewens & Miller, Inc. v. Commissioner, 117 T.C. 263,
270 (2001); Peno Trucking, Inc. v. Commissioner, T.C. Memo. 2007-
66; secs. 31.3121(d)-1(c)(2), 31.3306(i)-1(b), Employment Tax
Regs.), as follows:
(1) Control over manner of accomplishing work;
(2) Investment in work facilities and tools;
(3) Opportunity for profit or loss;
(4) Termination of the work relationship;
(5) Participation in service integral to regular business;
(6) Length of the relationship; and
(7) Intent of the parties as to the type of
relationship formed.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: March 27, 2008