CAN YOU HELP ME PREPARE A MEMO TO ANSWER THIS QUESTION? Matt Olson, Kenley Jansen, Dansby Swanson and Austin Riley are t

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CAN YOU HELP ME PREPARE A MEMO TO ANSWER THIS
QUESTION?
Matt Olson, Kenley Jansen, Dansby Swanson and Austin Riley are
the directors and founders of The University of the State of
Arkansas (USA), a private, not-for-profit organization that offers
online bachelors programs. All four have experience as
welders. USA offers an online bachelor’s degree in applied
science (BAS) in welding. Swanson regularly teaches the
introductory course, WELD 101.
Directors are compensated at the rate of $250,000 per year plus
direct expenses to attend meetings. All directors are
properly treated as independent contractors.
The four founders rotate the leadership roles annually.
Accordingly, Swanson was the chairperson of the board of directors
in 2000, 2004, 2008, 2012, 2016, and 2020.
The directors provide broad oversight, but day-to-day operations
of USA are managed by the corporate officers. Max Fried has
led the position of Chancellor, roughly equivalent to CEO, since
20015. Officers are treated as employees.
Full-time faculty are also treated as employees. However,
part-time faculty are treated as independent contractors. In
2020, Swanson received $5,000 in compensation for teaching WELD
101.
The IRS has instituted a payroll tax audit of USA for the years
2020 and 2021. The agent’s position is that all part-time
faculty must be treated as employees, and that Swanson cannot both
be an independent contractor and an employee for the same
period. The agent proposes that all of Swanson’s compensation
be treated as wages.
Fried wants you to let him know if the part-time faculty must be
treated as employees. What additional information do you need
to answer this question? More importantly, can Swanson be
both an employee and an independent contractor in the same
year?
Possible research aids: §§ 3121(a), 3121(d)(1),
3401(a). Rev. Rul. 58-505, 1958-2 C.B. 728