The IRS Decides Who's an Employee and Who Isn't

The Fairbanks Daily News-Miner explains:

IRS forces city to alter Clay Street Cemetery maintenance arrangement
by Dorothy Chomicz/dchomicz@newsminer.com
Apr 08, 2012

FAIRBANKS — An arrangement in which the city paid a local man several thousand dollars per year to maintain the Clay Street Cemetery has come to an end thanks to the Internal Revenue Service.

According to Tony Shumate, human resources and purchasing director for the city, the IRS conducted an independent audit of the city’s vendors and found Frank Turney does not meet the criteria for being an independent contractor.

“They have established that we have behavioral control over him, and that says that he is an employee,” Shumate said.

The IRS says behavioral control means the business has the right to direct or control not only what work is done but how it is done.

Since the city can no longer hire Turney as an independent contractor, the only other option would be to hire him as a temporary employee, something that would have created a separate set of hurdles, according to Shumate.

“All of our temporary employees are normally coming out of the unions. He could join one, but that doesn’t mean we would have a right to call him in, because he would have to get on their hiring list and he’d be low guy on the totem pole,” Shumate said.

As for Turney, joining a union was not a viable alternative.

“Tony mentioned to me, ‘Well Frank, you’d have to join the union.’ Well, Frank Turney is not going to join no government union. That’s out, that’s completely out,” Turney said.

Turney feels the city should pay him for the work he would have done this year.

“Well, why not? They’ve already appropriated the money in their budget. I would have just hoped they would have lived up to that contract. I’m not responsible for the city and the IRS. That’s their problem, not mine,” Turney said.

The Clay Street Cemetery was established in 1903 and is on the National Register of Historic Places. Maintenance of the cemetery will now be done by the city’s Department of Public Works.


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