Workers for Cleaning Service Weren’t Employees

A taxpayer who owned a cleaning service for vacated apartments engaged workers (who spoke only Portuguese or Spanish) as needed and treated them as 1099 independent contractors. Despite IRS claims they were employees, the Tax Court agreed with the taxpayer that they were independent contractors. Under the facts of the case, the taxpayer did not exercise the requisite control to make them employees. The workers used their own supplies, were not supervised, were not regularly engaged, and were free to engage their own assistants. The taxpayer was more like a dispatcher who acted as a “financial and linguistic bridge” between the apartment complexes and the workers.

Alert: Follow coronavirus-related federal tax changes for your business through the IRS.

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