Model
Agreement
and
Other Key Forms
For
Firms Using Independent Contractors
Key Document
Document Use
Document Source
Model Agreement Between Payer / Firm and Payee / Independent Contractor
This document is a model agreement. It may be used (or modified) by firms using (or planning to use) independent contractors to perform services. Failure to use a well drafted agreement could result in the payee / workers being reclassified on audit to employee status. There is much more to worker status than an agreement; however, a well drafted agreement could make the difference between winning and losing an employment tax audit.
Mr. Urquhart is a Tax Attorney who is an expert on the independent contractor vs. employee issue. He has over 27 years of experience in counseling firms with employment tax compliance planning as well as representing firms facing State or IRS employment tax audits, IRS appeals division proceedings, and trials / hearings.
To see his resume in Adobe PDF format -- click here.
Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
Form SS-8 is used to request a ruling from the Internal Revenue Service concerning the status of a worker, or group of workers, for Federal employment tax purposes. In actual practice, this form is used more by workers / payees. For obvious reasons, payer / firms are rather timid or fearful about requesting a ruling from the IRS.
Request for Taxpayer Identification Number and Certification
This form should be used by any firm that plans to use independent contractors. The form is given to the payee / worker and is the best way to get from the payee / worker his or her taxpayer identification number. Failure to use this form (or one like it) could result in the firm being assessed, on IRS audit, with significant backup withholding taxes.
Instructions for the Requester of Form W-9
Miscellaneous Income
This form should be provided by the firm to its independent contractor, and filed with the government, each year. Failure to use this form could result in the loss by the firm of a chance to qualify for the misclassification relief in the section 530 safe harbor.
Instructions for Form 1099-MISC