TN 3 (07-09)

RS 02101.056 Furnishing Tools and Materials


IRS Revenue Ruling 71-524

A. Employee status

The fact that an employer furnishes tools, materials, etc., may show the existence of an employer-employee relationship. The employer can determine which tools the worker is to use and, to some extent, in what order and how they should be used. In some occupations and industries, it is customary for workers to provide their own tools, which are usually small hand tools; in that case, workers may be considered to be employees.

B. Independent contractor status

Independent contractors ordinarily furnish their own tools. If the hiring firm provides such items, they should be leased to the contractor at fair market rate.

C. Reference

Social Security Handbook, Chapter 817 : Are you provided with tools, materials, etc., to do your job?

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RS 02101.056 - Furnishing Tools and Materials - 11/16/2009
Batch run: 07/03/2014