Can 1099-misc be considered employee?

[AZ-Tax]

Seems to me any one who receives solely a 1099-misc from the employer would be considered SE unless there is no contract signed by both the Issuer of the 1099-misc (employer) and the recepient of the 1099-misc stating the recepient is SE. Any comments.

[solomon]

If the person believe he/she is an employee, then Form 8919 should be considered. Revenue Ruling 87-41 will give good guidance.

[JohnH]

True, but should the prospect of continued employment (or the loss thereof) somehow factor into the decision?

[JON]

Continued

employment?? If you want continued employment you better resolve it at the work place. If you do file on the return as should not be SE - IRS will of course be contacting the "employer"?

[Corduroy Frog]

Contacting?

Jon, I don't disagree with the direction of where you are going, but you really give the IRS too much credit.

If an employee is willing to avoid self-employment tax, and pay in only his half of FICA/Med, the procedure is to claim the 1099 income on line 7, file Form 8919, identify his employer, and sit back and watch the IRS come down on top of the employer, right??

Right, of course, but don't hold your breath. IRS may have one chance in ten where they actually come after the "employer."

[JON]

The few times

I have seen it the IRS has always contacted the employer.

[spanel]

I believe either way the Employee is going to pay something..


They didnt have any Fed taxes taken out w2 or 1099m...

They didnt have any SS taxes withheld w2 or 1099m(sch Se)

They didnt have any Med taxes withheld w2 or 1099m(sch Se)



Chris

[AZ-Tax]

So if I read the comments correctly....

If there is NO “Independent Contractor” agreement between the issuer of the 1099-misc and the recipient of the 1099-misc, this is a plus of these 2 having an Employer – Employee relationship, correct? Another plus is to have the Employer withhold Fed & State income taxes but that still leaves no SS & Medicare tax being withheld since form 1099-misc has no boxes for this. My client’s goal is to have an Employer – Employee relationship via receiving a 1099-misc opposed to a W-2 but even with all these withholdings, no IC agreement and reporting the 1099-misc income on form 1040 ln 7, could the IRS still rule there is no employer and employee relationship and the taxpayer was SE? Why isn’t the taxpayer receiving a W-2 opposed to a 1099-misc, his Attorney suggested this who the taxpayer retained for a future bankruptcy.

[AJsTax]

Independent contractor

is a very much discussed subject both here on forums and at the IRS.
Basically there are 20 questions that need to be answered to determine the correct status of an employee/contractor. One alone does not determine status. Even some that have a contract agreeing to independent contractor status have been overturned on review.

The most important factors are: what type of work is being done, is there a continuing relationship? Who controls how, when and where the work is being done, who provides the tools to do the work, who receives the income and assumes the risk on the project.

These are only some of the questions. The IRS is making a big push right now to get more employees correctly defined and on W-2s so that the employment taxes and withholding are timely paid.
of course that is why an employer wants to stay away from the W-2 so they can avoid employment taxes.