Training Materials for IRS Examiners on Worker Classification
The IRS has developed new training materials for tax examiners handling worker classification cases -- that is, whether a worker should be classified as an employee or an independent contractor. At the 1995 White House Conference on Small Business and at a number of town meetings with small business owners sponsored by the IRS, participants identified worker classification as one of small business major concerns.
To address this concern, all IRS examiners handling worker classification cases will receive additional training. The goal of the new training materials is to ensure that workers are properly classified as employees or independent contractors. They discuss the factors under common law that may indicate the existence of an employer/employee relationship and guide examiners in determining which of those factors are relevant. They also address the factors necessary to determine whether workers are statutory employees and emphasize that factors may change over time because business relationships and the work environment change over time.