TN 15 (06-97)

RS 01802.220 Employee Exclusion


The term “trade or business” shall not include services as an employee.


The following are deemed to be self-employed regardless of their possible status as employees:

  • Newspaper vendors who have attained age 18;

  • Sharefarmers;

  • A duly ordained, commissioned or licensed minister of a church in the exercise of his/her ministry or by a member of a religious order in the exercise of duties required by such order;

  • Certain employees of Foreign Governments and international organizations when the services are performed in the U.S. by a U.S. citizen;

  • Certain employees of State and local governments in positions compensated solely on a fee basis;

  • Certain members of fishing boat crews and other individuals who work on boats engaged in catching fish or other forms of marine life;

  • Real estate agents and direct sellers meeting certain conditions;

  • Employees of churches or church-controlled organizations that elect not to participate in Social Security.


1. General Rule

Develop only if material. If development is necessary, first determine whether there is an employer-employee relationship. If none, develop trade or business, or whether income is excluded as above.

2. Allegation

Accept the individual's allegation if:

  • The activity could constitute a trade or business;

  • Service would be covered if performed as an employee, and;

  • There was a consistent reporting of earnings.

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RS 01802.220 - Employee Exclusion - 10/24/2002
Batch run: 07/03/2014