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https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee
Independent Contractor
(Self-Employed) or Employee?
According to the IRS, the answer to this question is critical. It is a critical question for cab drivers. Cab drivers who are saddled with many obligations that only actual employees are subject to, and none of the benefits.
It is also a critical question for taxi regulators who assert the authority to control drivers in many ways that would only hold weight IF the taxi driver were an employee, with none of the obligations of an employer.
Taxi drivers are not employees.
But taxi drivers are treated that way, when regulators compel taxi drivers to work at specific times, use specific equipment, utilize certain vendors and/or, be put out of work - summarily, for charges involving suspicion of racism- without a hearing.
According to the IRS, the answer to this question is critical. It is a critical question for cab drivers. Cab drivers who are saddled with many obligations that only actual employees are subject to, and none of the benefits.
It is also a critical question for taxi regulators who assert the authority to control drivers in many ways that would only hold weight IF the taxi driver were an employee, with none of the obligations of an employer.
Taxi drivers are not employees.
But taxi drivers are treated that way, when regulators compel taxi drivers to work at specific times, use specific equipment, utilize certain vendors and/or, be put out of work - summarily, for charges involving suspicion of racism- without a hearing.
It is critical that
business owners correctly determine whether the individuals providing services
are employees or independent contractors.
Generally, you must
withhold income taxes, withhold and pay Social Security and Medicare taxes, and
pay unemployment tax on wages paid to an employee. You do not generally have to
withhold or pay any taxes on payments to independent contractors. IRS
Select the Scenario that Applies to You:
·
I am an independent contractor or in business for myself
If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center.
If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center.
·
I hire or contract with individuals to provide services to my
business
If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are.
If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are.
Before you can determine how to treat payments you make for
services, you must first know the business relationship that exists between you
and the person performing the services. The person performing the services may
be -
·
An employee (common-law employee)
In determining whether
the person providing service is an employee or an independent contractor, all
information that provides evidence of the degree of control and independence
must be considered.
Common Law Rules
Facts that provide evidence of the degree of control and
independence fall into three categories:
Behavioral: Does the company control or have
the right to control what the worker does and how the worker does his or her
job?
Behavioral
rules compel one to understand that the company renting taxi equipment (taxis)
is not the entity that asserts ‘control’ of the taxi drivers’ activity and the manner
of that activity. There is a business relationship between taxi driver and taxi
owner that is similar to any car rental agencies. The vehicle owner has no
control over the activities of the taxi driver nor of the patrons of car rental
agencies. The vehicle operator is not an employee of the vehicle owner.
Financial: Are the business aspects of the
worker’s job controlled by the payer? (these include things like how worker is
paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
The operators of rented
vehicles (taxis or other cars) actually pay the owners of the vehicles in
question, not the other way around. No expenses are reimbursed; no tools or
supplies are provided.
Type of Relationship: Are there written
contracts or employee type benefits (i.e. pension plan, insurance, vacation
pay, etc.)? Will the relationship continue and is the work performed a key
aspect of the business?
There are written
contracts, which do not involve pensions, insurance and vacation pay.
SO, TAXI DRIVERS ARE
INDEPENDENT CONTRACTORS!!
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