Examples: Neota Logic In Action

Independent Contractor Status Advisor

Is the worker an employee or contractor?

Avoid penalties by applying IRS rules and other laws to make this important distinction
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Users	Managers in corporations, owners of businesses
Function	Determines whether a particular worker should be classified as an "employee" or "contractor" based on IRS rules and other laws
The Stakes	If an employer misclassifies an employee as a contractor with no reasonable basis for doing so, the employer may be held liable for a penalty rate on employment taxes – along with substantial fines.
Rules	Approximately 900 - Covering: IRS Regulations Common Law Tests Requirements of Section 530 of the Revenue Act of 1978
Factual Variations	More than 8 million covered
Questions Asked	12-to-23 asked per session, based on fact pattern
Time to Answer	2-4 minutes via an interview
Benefits to Managers	Provides instant fact-specific legal advice on a difficult question that often requires subjective weighting and balancing of many factors Ensures fast, efficient, and consistent decision-making process Avoids IRS fines and penalties by injecting legal guidance when it otherwise may not be provided Provides a clear audit trail of business decision-making
Benefits to Lawyers	Leverages their expertise by applying it instantly on any fact pattern when client needs it - and imbeds their expertise into daily operations of client Generates revenue per-use Solidifies the client relationship and generates related traditional business
Benefits to Regulators	Ensures that through legal analysis is applied for each employee Provides vivid audit trail of legal decision-making
Commentary	With more companies using contractors, the IRS and State revenue departments are increasingly viewing the use of contract labor with suspicion. If an employer misclassifies an employee as a contractor, the employer may be liable for employment taxes for that worker as if the amount required to be withheld were equal to 1.5 percent of the employee wages. So, penalties for a person earning $30,000 per year would be calculated on $45,000 per year. And other fines would likely apply. To determine if a particular worker is an employee, the IRS and courts look closely at the degree of actual or potential control the business has over the worker. This system enables this complex analysis to be done professionally and quickly on a case-by-case basis.
Test Drive	First, click-through the system accepting the default answers and view the report. Then click Start Over to try a different set of facts.

[ Run Demo Application ]