Summarize the tax issues and your recommendation

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Reference no: EM131130751

Seminar in Tax

You are employed as Tax Analyst for a company, located in Pennsylvania that manufactures and distributes paper products. The Director of Domestic Tax informs you that the Company is considering changing its warehouse workers from employees to independent contractors.

Based on the following facts, the Director has requested you to prepare a brief memo (2-3 pages) summarizing the tax issues and your recommendation whether the individuals will be classified for US tax purposes as employees or independent contractors. Use Checkpoint , IRS.Gov or other sources for your research.

Facts

The Company will continue to own the delivery trucks and pay all operating costs for the vehicles. The Company will specify the sequence of deliveries and the workers will be prohibited from using this vehicle for related services. The Company will provide uniforms to the workers, a detachable logo for the trucks, and conduct training and safety programs.

The workers will be paid on a commission basis with no deductions for payroll taxes. The workers will receive no "paid time off" - holidays, vacations, and they are not required to work on a set schedule. They may provide delivery service for other companies. The written agreement between the workers and the Company is designated as an Independent Contractor Agreement, and may be terminated by either party.

List the sources for your research. That must be included.

Reference no: EM131130751

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