Independent Contractor or Employee? – Documenting a Worker

This is the seventh post in the Independent Contractor/Employee series. This series is dedicated to presenting individuals, sole proprietorships, and small to large businesses with a basic understanding of independent contractor issues.

The following is a list of items a taxpayer may provide the examining agency to support a position that workers are independent contractors.

1. Affidavits from the workers explaining their relationship with the company and other customers;
2. Copies of checks written by workers for the purchase of tools; materials and supplies; to pay assistants or employees; or, checks for other items written on a business account;
3. Invoices showing the purchase of tools, materials, or supplies;
4. A list of assistants or employees of the workers;
5. Forms W-2 or Forms 1099 issued by the worker to assistants or employees;
6. Bank records showing a separate business account maintained by the worker;
7. Tax returns showing the worker’s business income and expenses on Schedule C;
8. A Minnesota business license issued in the worker’s name;
9. A list of other customers of the workers;
10. Copies of worker’s agreements with other customers;
11. Worker’s “yellow pages” ads or “white pages” business listings;
12. Workers’ newspaper, trade journal or magazine ads;
13. Photographs of other types of advertising such as signs, posters or ads on vehicles;
14. Letterhead, business cards, invoices or other documents showing the worker holding himself or herself out as a business;
15. A separate business address for the worker;
16. Evidence of liability insurance paid by the worker; and,
17. Ledger books, accounting journals, or other books and records;
18. Signed Forms 4669 from the workers indicating the amount of income they declared on their federal income tax returns and the amount of tax they paid.