AG 2008 01 22 - Laserfiche WebLink

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Memorandum #1079 May 21, 2007 Page 4 Examples Cited in IRS Publications Mayor and Governing Board: The IRS has been clear that public officials, both elected and appointed are employees. Any compensation other than reimbursement of expenses under an accountable plan would be reported as W-2 wages with income, social security, and Medicare taxes withheld. The mayor and governing board are considered public officials. A municipal clerk also is considered a public official and should be treated the same. Expense reimbursements paid under an accountable plan, that is one in which the employee is required to produce receipts or mileage records and is reimbursed based on those receipts and mileage records, are not included in W-2 wages nor are they reported on a 1099-MISC. Umpires and Referees fqr Local Government Skonsored Recreation Leagues: There seems to be confusion regarding umpires and referees as some entities may be treating them as employees and others may be treating them as independent contractors. The IRS appears to be taking a strict position towards employee treatment. The local government entity should treat umpires and referees as employees if they are recruiting them, paying them directly, assigning them to games and instructing the officials in policies and procedures. This is an indication of the right of control that tips the scale to employee treatment, If the local government contracts with an association to provide umpires/referees and they do not have workers compensation, the local government will have to cover them as an employee. Instructors: It is common for recreation departments to offer classes to citizens in various subjects using part time instructors from the community with expertise in the subject matter. This is another situation where. entities may be treating the instructors as independent contractors when they really should be employees. Once again, the entity must consider the right of control over the instructors and the class. If the organization is providing the space, handling the registration fees, providing materials and audio visual equipment, and setting the minimum participation required for the class then the instructor should be considered an employee of the entity. If the government is simply renting space to an instructor and that instructor is directly handling all the other aspects of administering the class then you could make the case for classification as an independent contractor. Volunteer Firefighters and Emergency Medical Technicians: Volunteer firefighters are considered employees and their remuneration is generally subject to all withholding taxes. However, if the payment is a nominal reimbursement for out-of-pocket expenses actually incurred, and the payment is accounted for according to the requirements of Reg. 1.62-2 regarding accountable plans, then the payment could be excludable from the firefighter's W-2. Day Laborers: The IRS does not recognize casual labor as these workers are still considered employees. Even if a worker only works one day, he or she is still an employee as the entity has control over when and where the person reports to work and control over how the person does the job as well as what type of job the person does. ~~