This form must be completed if you wish to pay an individual for services rendered by any method other than payroll check. Employers who utilize independent contractors may experience IRS audits and be subject to back tax liabilities, possible penalties and interest, and potential wage equity and overtime pay violations when non-exempt work is performed. In order to protect the interests of the University, budget administrators and grant principal investigators must be able to justify independent contractor status prior to entering such a relationship. In the majority of cases under audit, the IRS requires that affected workers be hired as employees rather than as independent contractors, and placed on the payroll to assure appropriate tax withholding and legally required benefit coverage. These criteria are not all-inclusive.
Classification is based on all facts and circumstances.
A worker may be considered an independent contractor when the employer has the right to control or direct only the result of the work and not how it is done. To help preserve independent contractor status, the independent contractor relationship should be formalized by written agreement. These criteria are not all-inclusive. Classification is based on all facts and circumstances. A federal employer identification number or social security number must also appear on the requisition.