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In evaluating whether an employment relationship exists
between a business and one of its workers, the courts consider
the following factors to decide whether a worker is a common law
employee or an independent contractor: (1) The degree of control
exercised by the principal; (2) which party invests in the work
facilities used by the individual; (3) the opportunity of the
individual for profit or loss; (4) whether the principal can
discharge the individual; (5) whether the work is part of the
principal’s regular business; (6) the permanency of the
relationship; and (7) the relationship the parties believed they
were creating. Ewens & Miller, Inc. v. Commissioner, 117 T.C.
263, 270 (2001); Weber v. Commissioner, 103 T.C. 378, 387 (1994),
affd. per curiam 60 F.3d 1104 (4th Cir. 1995). All of the facts
and circumstances of each case are considered, and no single
factor is dispositive. Ewens & Miller, Inc. v. Commissioner,
supra at 270; Weber v. Commissioner, supra at 387. We consider
the factors below.
1. Degree of Control
While no single factor is dispositive, the degree of control
exercised by the principal over the details of the individual’s
work is one of the most important factors in determining whether
a common law employment relationship exists. See, e.g.,
Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S.
440, 448 (2003); Leavell v. Commissioner, 104 T.C. 140, 149
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Last modified: November 10, 2007