Frequently, the Internal Revenue Service and taxpayers disagree about the classification of workers as independent contractors or employees. At stake is the collection of employment taxes, as well as eligibility to participate in the employer’s retirement plan. The IRS has developed audit programs that focus on employers who “misclassify” workers as independent contractors. These IRS programs can be expensive for employers and particularly painful for small businesses that may not be able to withstand the “economic strain” of additional employment taxes. And a worker who was misclassified as an independent contractor could also put the business’s retirement and benefit plans in jeopardy for failing to cover all employees. This article contains guidelines that can be used to help determine the status of workers--whether independent or employee.