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In an interesting decision, the Tax Court recently determined that an adjunct professor at Temple was an independent contractor, despite receiving a W-2 from the university. 

In Robinson v. Commissioner, TC Memo 2011-99,(2011) the taxpayer (Robinson) was employed as a full-time professor at Rowan University, where he taught classes related to criminal justice. Robinson earned additional income by periodically writing training curriculums for police officers and providing expert testimony. A large part of his outside work has included teaching classes at Temple University (Temple) and preparing curriculums for Temple’s training programs.

Relevant facts include:

  • The courses Robinson taught were not part of the university’s regular curriculum; rather, they were part of its Criminal Justice Training Program (CJTP).
  • The courses offered through the CJTP were not offered for college credit to regular Temple students. Instead, the students Robinson taught were usually police officers or other criminal justice personnel enrolled in the CJTP’s Municipal Police Academy. 
  • Robinson was not responsible for managing the enrollment in his classes, and Temple provided him with classroom space.
  •  Robinson bore no risk of loss from underenrollment in the courses, and he had no possibility of earning a profit in excess of his agreed compensation from Temple.
  • The curricula he wrote were prepared at the direction of Temple, which set the deadline for his finished product. The topics to be covered in the curricula were conveyed to him by Temple, but frequently they were mandated by the State commissions that contracted with Temple. Sometimes Robinson was responsible for only a portion of the curriculum; at other times he wrote or edited the entire curriculum. The completed curricula became the property of Temple. Robinson was paid an hourly rate for teaching and a flat rate for updating curricula.

Beginning around 1996, Temple to treat Robinson as an employee and report his income on Forms W-2, Wage and Tax Statement. Robinson requested that Temple treat him as an independent contractor, but Temple refused. Nonetheless, Robinson continued to report his income from Temple on Schedule C as if he were an independent contractor.

In deciding whether a taxpayer is an independent contractor or an employee, the courts typically analyze the following factors:

(1) The degree of control exercised by the principal;

(2) which party invests in the work facilities used by the worker;

(3) the opportunity of the individual for profit or loss;

 (4) whether the principal can discharge the individual;

(5) whether the work is part of the principal’s regular business;

(6) the permanency of the relationship;

(7) whether the worker is paid by the job or by the time;

(8) the relationship the parties believed they were creating; and

(9) the provision of employee benefits.

In reaching their decision, the Tax Court determined that  factors 1, 2, 5, 6, and 9 indicated that Robinson was an independent contractor, rather than an employee, for the following reasons:

1) Robinson had flexibility in designing some or all of the curricula, indicating that Temple did not have the right to control Robinson’s manner of performance. 

2) Temple provided classroom space, but no office for Robinson.

5) Robinson’s teaching of noncredit courses to police officers was not an essential piece of Temple’s regular business as a university.

6) As Robinson’s duties with Temple fluctuated wildly, his position was not permanent.

9) Temple did not provide any employee benefits to Robinson.

Apparently, these victories were enough to overcome those factors which indicated Robinson was an employee, most notably #8. The fact that Temple believed Robinson to be an employee  and issued him a W-2 was not dispostive. 

Unfortunately for Robinson, this would be the only victory he would enjoy. The court denied all of Robinson’s schedule C exepenses related to his income from Temple, as he failed to provide the adequate substantiation. In addition, the court disallowed all of Robinson’s unreimbursed employee expenses on Schedule A related to his full-time gig at Rowan, as again, he failed to support the expenses.

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