Internal Revenue Service

Ministers: Irs Audit Techniques Guide Internal Revenue Service

The first issue that must be determined is whether the minister is an employee or an independent contractor. This is primarily a factual question. Professional & Executive Leasing, Inc. v. Commissioner, 862 F.2d 751, 753 (9th Cir. 1988; James v. Commissioner, 25 T. C. 1296, 1300 (1956); Hand v. Commissioner, 16 T. C. 1410 (1951). The distinction between an employee and an independent contractor in this context must be made on common law grounds. United States v. Webb, Inc., 397 U. S. 179, 183 (1970). See also IRC section 3121(d)(2); Treas. Reg. sections 31.3121(d)-1(c) and 31.3401(c)-1. In determining whether a worker is an employee, "employer control over the manner in which the work is performed, 'either actual or the right to it, is the basic test.'" General Investment Corp. v. United States, 823 F.2d 337, 341 (9th cir. 1987, (quoting Air Terminal Cab, Inc. v. United States, 478 F.2d 575, 579 (8th Cir.), cert. denied, 414 U. S. 909 (1973)).