Independent Contractors vs. Employees
Rennette Apodoca, MPA, CPPO, Albuquerque Public Schools
Doug Vandenboom, Universit...
What is a Service?
NIGP:
Intangible commodity
IRS:
Furnishing of labor, time, or
effort does not involve any
specific en...
Our Story
•  Contracting Process
•  Decentralization
•  Origination
•  Management
•  Purchasing’s Role
•  Resources
•  Vo...
IRS AUDIT
•  Timing
•  Audit began in Fall 0f 2013
•  Settlement in Spring of 2015
•  Scope
•  Initial scope
•  941 Audit...
A Call For Help
•  Primary Departments:
•  Contracts & Purchasing
•  Student Accounts
•  Accounts Payable
•  Human Resourc...
Determinations – IRS places
determination on the owner
•  Can you tell by looking at
them?
•  Where they reside?
•  How ab...
Ask Questions!
Why Does it Matter?
•  Taxes
•  Benefits
•  Penalties
•  Interests
•  Could be sued
IRS Classifications
•  Employee
•  Statutory employee
•  Non-statutory employee
•  Independent Contractor
IRS
•  Department of Labor Standards
differ and sometimes conflict
with IRS
•  Updated July 2015
•  Increased focus on use ...


Common IRS Employee
Attributes
•  Comply with instructions about
when, where, and how work is
to be performed
•  T...
Common IRS
Contractor Attributes
•  Set their own hours and do the
job their own way
•  Perform work by their own
method
•...
How to make a
determination?
•  Vendor questionnaire
•  IRS SS – 8
•  Contracts – Scope of Work
What happens if 

you have an improper
determination ?
•  Volunteer Classification
Settlement Program
•  Relief under Secti...
Post-Audit Action 

Plan
•  Assembled a standing group
with representation from all
primary departments
•  Process mappin...
Purchasing’s Role
•  Improve the Contracting
Process
•  Increase efficiencies
•  Transparency
•  Internal Controls
•  Challe...
Process Improvement
•  Goals
•  Accessibility
•  Efficiency
•  Analytics / Visibility
•  Central Repository
•  Timing
•  Ex...
Our Progress
•  A new way of contracting
•  Demo of new system
Moving Forward
•  System Expansion
•  Training and develo...
Questions?
of 19

NAEP District Meeting Presentation

Published on: Mar 3, 2016
Source: www.slideshare.net


Transcripts - NAEP District Meeting Presentation

  • 1. Independent Contractors vs. Employees Rennette Apodoca, MPA, CPPO, Albuquerque Public Schools Doug Vandenboom, University of Idaho
  • 2. What is a Service? NIGP: Intangible commodity IRS: Furnishing of labor, time, or effort does not involve any specific end product (good)
  • 3. Our Story •  Contracting Process •  Decentralization •  Origination •  Management •  Purchasing’s Role •  Resources •  Volume and Value •  Variety of Agreements •  Chaos!
  • 4. IRS AUDIT •  Timing •  Audit began in Fall 0f 2013 •  Settlement in Spring of 2015 •  Scope •  Initial scope •  941 Audit •  1098-T •  1099 / W2 •  Comp Time
  • 5. A Call For Help •  Primary Departments: •  Contracts & Purchasing •  Student Accounts •  Accounts Payable •  Human Resources •  Payroll •  Career Center •  Legal Counsel
  • 6. Determinations – IRS places determination on the owner •  Can you tell by looking at them? •  Where they reside? •  How about their title? •  How about the amount of the contract? •  What if we ask the requesting department?
  • 7. Ask Questions!
  • 8. Why Does it Matter? •  Taxes •  Benefits •  Penalties •  Interests •  Could be sued
  • 9. IRS Classifications •  Employee •  Statutory employee •  Non-statutory employee •  Independent Contractor
  • 10. IRS •  Department of Labor Standards differ and sometimes conflict with IRS •  Updated July 2015 •  Increased focus on use of economic factors to determine nature of the relationship •  What is the core business of a university? Department of Labor (FLSA) •  Behavioral Control •  Financial Control •  Type of Relationship
  • 11. 
 Common IRS Employee Attributes •  Comply with instructions about when, where, and how work is to be performed •  Trained to perform services in a particular way •  Services rendered personally •  Continuing Relationship •  Employer sets employers hours and days •  Is furnished tools, materials, supplies
  • 12. Common IRS Contractor Attributes •  Set their own hours and do the job their own way •  Perform work by their own method •  Receive no training from the purchaser of their services •  Assign their own workers to do the job •  Hired to do one job; no continuous relationship •  Realize a profit or loss Areas of Concern •  Individuals with a 1099 and W2 in the same tax year •  Grants: •  External Evaluators •  Pass-through grants •  Event Planners •  Students
  • 13. How to make a determination? •  Vendor questionnaire •  IRS SS – 8 •  Contracts – Scope of Work
  • 14. What happens if 
 you have an improper determination ? •  Volunteer Classification Settlement Program •  Relief under Section 530
  • 15. Post-Audit Action 
 Plan •  Assembled a standing group with representation from all primary departments •  Process mapping •  Workflow •  Decision Trees •  Clear separation on areas of responsibility •  Communication Strategy
  • 16. Purchasing’s Role •  Improve the Contracting Process •  Increase efficiencies •  Transparency •  Internal Controls •  Challenges •  Change Management •  Resources •  Time
  • 17. Process Improvement •  Goals •  Accessibility •  Efficiency •  Analytics / Visibility •  Central Repository •  Timing •  Expandability
  • 18. Our Progress •  A new way of contracting •  Demo of new system Moving Forward •  System Expansion •  Training and development for campus users
  • 19. Questions?

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