When determining independent contractor status, the IRS uses a three-category test. Which category focuses on whether the business controls how the worker performs their tasks?
Correct Answer
B) Behavioral control
Behavioral control examines whether the business has the right to control how the worker performs their tasks, including what tools to use, where to work, and what sequence to follow.
Why This Is the Correct Answer
Behavioral control is the IRS category that specifically examines whether the business has the right to direct and control how work is performed. This includes controlling the methods, procedures, tools, and sequence of work tasks. When a business dictates the specific way work must be done rather than just the end result, it indicates an employee relationship rather than an independent contractor relationship. This control over the 'how' of work performance is the defining characteristic of behavioral control.
Why the Other Options Are Wrong
Option A: Financial control
Financial control focuses on the business aspects of the worker's job, such as how the worker is paid, whether expenses are reimbursed, and who provides tools and supplies, not how tasks are performed.
Option C: Type of relationship
Type of relationship examines factors like written contracts, employee benefits, permanency of the relationship, and whether the work is a key aspect of the business, not task performance control.
Option D: Economic dependency
Economic dependency is not one of the three official IRS categories for determining independent contractor status; the three categories are behavioral control, financial control, and type of relationship.
Memory Technique
Think 'Behavior = How' - Behavioral control is about HOW the work gets done, while Financial control is about WHO pays for what, and Relationship type is about WHAT kind of working arrangement exists.
Reference Hint
IRS Publication 15-A (Employer's Supplemental Tax Guide), Chapter 2 - Employee or Independent Contractor
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