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FAQs for Indian Tribal Governments regarding Employee vs. Independent Contractor

These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Indian law and Federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.

  1. What is the difference between an employee and an independent contractor?
  2. How do you determine who is an employee and who is an independent contractor?
  3. What is behavioral control?
  4. What is financial control?
  5. What is relationship of the parties?
  6. If a worker has a contract with the tribe, is he/she an independent contractor?
  7. Does the IRS make determinations as to whether a worker is an employee or an independent contractor?
  8. What are some examples of employees?
  9. What is an example of an independent contractor?
  10. When does the tribe have to file a Form 1099-MISC, Miscellaneous Income, for an independent contractor?
  11. If a worker is determined to be an independent contractor, what documentation should the tribe maintain?
  12. What if a contractor does not provide the tribe with a completed Form W-9?
  13. What is backup withholding?  
  14. What are the reasons for backup withholding?  Is there any other type of income tax withholding?   
  15. What report should be filed with the IRS for backup withholding?   
  16. If a contractor is a corporation, does the tribe have to file a Form 1099?     
  17. If a contractor is not incorporated, does the tribe have to file a Form 1099? 
  18. Are there requirements to file electronically when a tribe is required to file 250 or more information returns?   
  19. What should I do if I receive a notice from the IRS that my Form 1099 information contains a mismatch or discrepancy?  
  20. How do I treat foreign persons working as independent contractors?   
  21. How do we know if an employee is legal to work in the U.S.? 
  22. If we have foreign persons who are working for us as employees, are there any special rules for withholding?   
  23. What amount should I withhold on a foreign student working as an employee?  
  24. How do I treat nonresident alien individuals who are working as independent contractors?  

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Page Last Reviewed or Updated: 06-Dec-2016