Does the IRS view your sub-contractors as independent contractors or employees?
Q: I am a general contractor and uncertain how the Internal Revenue Service will view my relationship with sub-contractors. Are they regarded as independent contractors or my employees?
A: The question of who is an independent contractor seems to be a constant source of confusion among many small business owners. One notion is that if an individual signs an independent contractor agreement, the general contractor or employer has nothing to fear from the Internal Revenue Service. Such an agreement is not worth the paper it’s written on unless it meets certain criteria established by IRS.