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employer is liable for the amounts required to be withheld if the
employer does not withhold as required. Sec. 3403.
For employment tax purposes, the term “employee” includes
“any individual who, under the usual common law rules applicable
in determining the employer-employee relationship,[13] has the
status of an employee”. Sec. 3121(d)(2); accord sec. 3306(i).
In applying the common law rules, uncertainty should be resolved
in favor of employment. Breaux & Daigle, Inc. v. United States,
900 F.2d 49, 52 (5th Cir. 1990).
13Secs. 31.3121(d)-1(c)(2) and 31.3306(i)-1(b), Employment
Tax Regs., define an employer-employee relationship as follows:
Generally such relationship exists when the person for
whom services are performed has the right to control
and direct the individual who performs the services,
not only as to the result to be accomplished by the
work but also as to the details and means by which that
result is accomplished. That is, an employee is
subject to the will and control of the employer not
only as to what shall be done but how it shall be done.
In this connection, it is not necessary that the
employer actually direct or control the manner in which
the services are performed; it is sufficient if he has
the right to do so. The right to discharge is 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 of 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 an independent
contractor. * * *
See also sec. 31.3401(c)-1(b), Employment Tax Regs. (using
virtually identical language).
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Last modified: November 10, 2007