How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lev Your Own Question

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22749
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

We are a non-profit corp that provides emergency shelter services

Resolved Question:

We are a non-profit corp that provides emergency shelter services and transitional housing to homeless people. We have a person who lives in one of our apartment units to monitor the transitional housing facilities (property & resident families) during non-business hours and contacts 911 or the "on-call Staff person" if there is an incident with the residents or an emergency repair situation. This individual is given one of the apartment units & paid utilities as compensation and is expected to live on-site in the unit. Time away can be up to 24 days per year and need to be arranged in advance with the Executive Director of the Organization.
Is this "resident advisor" an employee or independent contractor?
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

IRS publication 15 - http://www.irs.gov/pub/irs-pdf/p15.pdf is the main document that addresses employee status = page 7. A general rule is that anyone who performs services for you is your employee if you can control what will be done and how it will be done. This distinction is important because an employee and self-employed are taxed differently.

 

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

Facts that provide evidence of the degree of control and independence fall into three categories:
- Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
- Financial: Are the business aspects of the worker's job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
- Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

 

If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker's status.

 

A lodging is considered a fringe benefit which is a form of pay for the performance of services. Any fringe benefit provided to an employee is taxable and must be included in the recipient's pay unless the law specifically excludes it.

 

Please refer to IRS publication 15B - www.irs.gov/pub/irs-pdf/p15b.pdf

You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests.

  • It is furnished on your business premises.

  • It is furnished for your convenience.

  • The employee must accept it as a condition of employment.

The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging.

On your business premises. For this exclusion, your business premises is generally your employee's place of work.

For your convenience. Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the lodging is furnished as pay. However, a written statement that the lodging is furnished for your convenience is not sufficient.

Condition of employment. Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging.

 

If these conditions met - an employer should not include the value of lodging into employee's taxable wages.

Let me know if you need any help.

 

Customer: replied 4 years ago.
I got all this from reading publications 15A & 15B. I am also aware of form SS-8 and have downloaded the form & instructions. What I get from your response is that this individual is likely to be classified as an employee. They must live on our premises in order to fulfill the job assignment requirements. Their presence ensures residents comply with the program requirements (no drugs, alcohol, weapons). If the housing provided to this individual (for the organization's benefit and it is required they reside in the apartment on our premises) is the only form of "compensation", am I correct there will be no reportable compensation? They receive no other payments and are not entitled to any other benefits.
Expert:  Lev replied 4 years ago.

I am glad to know that you have a sufficient knowledge about determination of a worker's status.

 

Please be aware that answers posted on that site are for general information, and are not intended to substitute for informed professional advice and do not establish a professional-client relationship.

Thus I may help you to determine the worker's status, but I am not in the position to make such determination.

If based on provided information you are still unable to determine if the worker is an employee or a self-employed contractor - the IRS might do such determination and the form SS-8 is a formal way to request the determination from the IRS.

 

However - if you have an employee - regardless of the type of your organization - you are required to pay at least minimum wages, pay FICA and FUTA taxes.

If you exclude the value of lodging from wages - you still need to track working hours and pay wages.

 

If you the person provides service to non-profit organization without compensation - that person is not an employee.

Sometimes non-profit organizations give small compensation to volunteers - which is a taxable income - but not wages and not a self-employment income.

In this case - the value of lodging would constitute such income.

 

The question in this situation - if you may use same rules to exclude the value of lodging provided to volunteers as for employees?

I personally think yes - but please be aware that there is no clear determination and such interpretation bears a risk.

 

So to address your question - am I correct there will be no reportable compensation?

Most likely - you are correct, but you need to be clear with determination of the person's status and the type of compensation as discussed above.

 

Let me know if you need any help.

 



Edited by LEV on 7/1/2010 at 5:41 PM EST
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22749
Experience: Taxes, Immigration, Labor Relations
Lev and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.