Section 1: The Employer-employee Relationship
- 1.Which of the following forms may be completed and submitted to the IRS to determine the employment status of an individual for federal income and employment tax purposes?
- A.
Form SS-4
- B.
Form SS-5
- C.
Form SS-8
- D.
Form W-9
- 2.Which of the following forms must be submitted to an independent contractor (who is paid at leat $600) after the end of the year for services performed during that year?
- A.
Form W-2
- B.
Form 1099-MISC
- C.
Form 1096
- D.
Form SS-8
- 3.All of the following types of evidence support an employer's treatment of a worker as an independent contractor under the "reasonable basis" test EXCEPT:
- A.
Place of Work
- B.
Court Decisions
- C.
Private Letter Rulings
- D.
Past IRS employment Tax Audits
- 4.All of the following criteria would be typical of an independent contractor EXCEPT:
- A.
Works off site
- B.
Paid by the hour
- C.
Furnishes own tools
- D.
Sets own work hours
- 5.Each of the following individuals would be classified as an employee EXCEPT:
- A.
Controller of a company
- B.
College professor
- C.
Attorney (solo practitioner)
- D.
City police officer
- 6.All of the following workers are statutory employees EXCEPT:
- A.
Full-Time life insurance salespersons
- B.
Qualified Real Estate Agents
- C.
Homeworkers
- D.
Traveling or City Salespersons
- 7.Full-Time life insurance salespersons paid solely by commission are exempt from:
- A.
Social Security and Medicare Taxes
- B.
Social Security Tax only
- C.
FUTA tax
- D.
Social Security, Medicare and FUTA taxes
- 8.If an employer fails to withhold social security and Medicare taxes from a worker it misclassifies as an independent contractor and does not file a form W-2 or a Form 1099 for that worker, what penalty may the IRS impose?
- A.
10% of the employees share of social security and Medicare taxes
- B.
20% of the employees share of social security and Medicare taxes
- C.
40% of the employees share of social security and Medicare taxes
- D.
100% of the employees share of social security and Medicare taxes
- 9.How long must an employer retain a Form I-9 for a terminated employee who worked for the employer for more than four years?
- A.
1 year after termination
- B.
3 years after termination
- C.
7 years after termination
- D.
Does not have to keep terminated employees' I-9 forms
- 10.Which of the following situations describes one of the general requirements that must be met for workers to be considered statutory employees?
- A.
They have a continuing relationship with the employer
- B.
They have a substantial investment in the business equipment
- C.
They are licensed real estate agents
- D.
Most of their compensation is related to sales
- 11.Each of the following goals is a reason why states might require employers to report newly hired employees EXCEPT:
- A.
To detect welfare fraud
- B.
To detect unemployment compensation fraud
- C.
To locate individuals who have not claimed state lottery winnings
- D.
To locate noncustodial parents subject to a child support withholding order
- 12.Which of the following individuals are statutory non-employees?
- A.
Homeworkers
- B.
Full-time life insurance salespersons
- C.
Newspaper deliverers
- D.
Traveling salespersons
- 13.If the employer has the right to control what work will be done and how that work will be done, an employer-employee relationship exists
- A.
True
- B.
False
- 14.Full-time life insurance salespersons are always considered statutory employees and are never subject to FUTA tax
- A.
True
- B.
False
- 15.Workers hired through a temporary help agency are not employees of the client company
- A.
True
- B.
False
- 16.Telemarketers working under the direction of a company are usually independent contractors
- A.
True
- B.
False
- 17.An accountant who provides bookkeeping and payroll services to several local businesses and works at her own office is an independent contractor
- A.
True
- B.
False
- 18.The responsibility for determining the employment status of an individual who performs services rests with the employer
- A.
True
- B.
False
- 19.If an independent contractor timely provides the employer with a correct Taxpayer Identification Number, there will be no backup withholding.
- A.
True
- B.
False
- 20.If an employer uses the E-verify program, a new hire does not have to enter their SSN in section 1 of Form I-9
- A.
True
- B.
False
- 21.Managers and executives are excluded from the employer-employee relationship for tax purposes
- A.
True
- B.
False
- 22.Length of employment makes no difference in determining employment status
- A.
True
- B.
False
- 23.Technical services specialist are specifically excluded from the "reasonable basis" test
- A.
True
- B.
False
- 24.Under the ABC test, one of the determining factors is whether the worker in question is free from control or direction in performing the work both by an agreement and in reality
- A.
True
- B.
False
- 25.Part-Time employees are not covered under the federal payroll tax laws even if they meet the common law test for employment status
- A.
True
- B.
False
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