TN 7 (08-10)

RS 02101.064 Financial Control Involving Services Available to the Public


IRS Revenue Ruling 56-660

A. Employee status involving service to the public

Employees work primarily for the hiring firm. Employers usually control and direct their employees to the extent that they are not free to sell their services to the public. In addition, they are not in a position to regulate their work time or divide their services.

B. Independent contractor status involving service to the public

Independent contractors make their services available to the public on a regular and consistent basis and must refrain from control by others. Independent contractors often advertise, maintain a visible business location, and are available to work for the relevant market.

Independent contractors may hold their services out to the public using various methods including:

  • advertising in newspapers, trade journals, magazines, etc.;

  • listing in business directories;

  • hanging “shingles” in front of their home or office;

  • holding business licenses; and

  • maintaining business listings in telephone directories.

For example, Al’s Painting, Inc. hired Noah to paint several office buildings. Noah advertises his services in the Yellow Pages and Penny Saver. The fact that Noah advertises his services indicates that he is available to perform services for the relevant market.

C. Reference

Social Security Handbook, section 821 : Do you make your services available to the general public?


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RS 02101.064 - Financial Control Involving Services Available to the Public - 08/17/2010
Batch run: 07/03/2014