The Internal Revenue Service has developed a list of the following 20 questions with the intention of providing a clearer picture of the relationship between a firm and a subcontractor. This checklist should be of special interest to anyone operating a farrier business.
- Is the worker required to comply with instructions?
- Is the worker provided with training?
- Are the worker's services integral to the business operations?
- Must the worker render the services personally?
- Who has the power to hire, supervise and pay assistants?
- Is there a continuing relationship?
- Are there set hours of work?
- Is there a full-time work requirement?
- Is the work done on the premises of the business?
- Is the order or sequence of the work established?
- Are oral or written reports required?
- Is payment made by the hour, week or month?
- Who pays the worker's business and/or travel expenses?
- Who furnished the worker's tools and materials?
- Has the worker made a significant investment in work facilities?
- Will the worker realize a profit or loss from the activity?
- Does the worker work for more then one business at a time?
- Are the worker's services available to the general public?
- May the worker be discharged?
- Does the worker have the right to terminate the relationship at any time?
Dealing legally with apprentices, subcontractor or independent contractors status can be extremely complicated for farriers. For details on how it needs to be done, see the article, “Know The Rules Before The Internal Revenue Service Knocks On Your Door” that appears on Pages 58 to 63 of the May/June 2014 issue of American Farriers Journal.