Ronald E. Byers - Page 13




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               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.                                                   






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