Individual Independent Contractor Travel Expense Report: Fill & Download for Free

I am no employment lawyer nor do I have a lot of experience with Uber, but this is my assessment of an Uber driver's statusThe rule is that an independent contractor should answer Yes to all 4 of these questionProfit or loss. Can the worker make a profit or suffer a loss as a result of the work, aside from the money earned from the project? (This should involve real economic risk-not just the risk of not getting paid.)Investment. Does the worker have an investment in the equipment and facilities used to do the work? (The greater the investment, the more likely independent contractor status.)Works for more than one firm. Does the person work for more than one company at a time?(This tends to indicate independent contractor status, but isn’t conclusive since employees canalso work for more than one employer.Services offered to the general public. Does the worker offer services to the general public?1.) Yes, the car and its maintenance and the fuel.2.) Yes, the car.3.) It is possible to work for Lyft and Uber at the same time and generally drivers work for more than Uber.4.) YesAdditionally ,they should answer No to all of the following questionsInstructions. Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker.)Training. Do you train the worker to do the job in a particular way? (Independent contractors are already trained.)Integration. Are the worker’s services so important to your business that they have become anecessary part of the business? (This may show that the worker is subject to your control.)Services rendered personally. Must the worker provide the services personally, as opposed to delegating tasks to someone else? (This indicates that you are interested in the methods employed, and not just the results.)Hiring assistants. Do you hire, supervise, and pay the worker’s assistants? (Independentcontractors hire and pay their own staff.)Continuing relationship. Is there an ongoing relationship between the worker and yourself? (A relationship can be considered ongoing if services are performed frequently, but irregularly.)Work hours. Do you set the worker’s hours? (Independent contractors are masters of theirown time.)Full-time work. Must the worker spend all of his or her time on your job? (Independent contractors choose when and where they will work.)Work done on premises. Must the individual work on your premises, or do you control theroute or location where the work must be performed? (Answering no doesn’t by itself meanindependent contractor status.)Sequence. Do you have the right to determine the order in which services are performed? (This shows control over the worker)Reports. Must the worker give you reports accounting for his or her actions? (This may show lack of independence)Pay Schedules. Do you pay the worker by hour, week, or month? (Independent contractors are generally paid by the job or commission, although by industry practice, some are paid by the hour.)Expenses. Do you pay the worker’s business or travel costs? (This tends to show control.)Tools and materials. Do you provide the worker with equipment, tools, or materials? (Independent contractors generally supply the materials for the job and use their own tools and equipment.)Right to fire. Can you fire the worker? (An independent contractor can’t be fired without subjecting you to the risk of breach of contract lawsuit.)Worker’s right to quit. Can the worker quit at any time, without incurring liability? (An independent contractor has a legal obligation to complete the contract.)1.) No, the instructions are fairly minimal and flexible.2.) No, there is not much training3.) Yes, they are central to Uber's business model if you view it as a service provider rather than simply a platform4.) Yes, the services should be rendered by the driver and not someone standing in for the driver5.) No, there are no assistants6.) Yes, generally there is an on-going relationship7.) No, the hours aren't set8.) No, there is no expectation of regular hours9.) No, the work is not done at a given location10.) There is some control over the routing of customers to them, but this seems minimal11.) The platform automatically creates reports for Uber, this seems borderline12.) No, they are paid by the job13.) No, they definitely don't want to pay for any expenses14.) Not significantly, they provide an app, which is very minimal tools15.) This is borderline since the rating of drivers can cause drivers to be effectively fired16.) Yes, the workers can stop working at any time.There are 4 Yes answers and 2 borderline cases out of the 16 that should be No. This seems right at the edge to me.I'm betting that Uber is even happier with the decision to raid CMU to get to an all automated economy sooner rather than later. They're probably thinking "This sharing economy is too complicated!"

In the US, freelancers are considered “independent contractors.” The IRS has tight regulations about the working relationship between ICs and the companies to which they contract. Many ICs have to turn in something like a timesheet or invoice in order to be paid; the company can specify how the timesheet looks. Going back to IRS regs: the only real control a company has when contracting for ICs is selection. Do you want this individual to work for your company? Do you believe this individual has the requisite skills? Companies cannot “manage” ICs; they can only select, pay and terminate their services. Anything else moves towards a relationship that the IRS considers an employee. One example: a consultant friend used a dozen ICs on a large project. In an attempt to be helpful, and because of how the client paid for travel expenses, he had his corporate travel agent arrange for the ICs travel, and he paid for the travel on a corporate card. After an audit, his company was fined by the IRS because they disallowed the company’s payment for ICs’ travel expenses; those should have been added to ICs’ expense reports for reimbursement.

From the bot note, we have the following scenario. A non US individual operates a technology service venture with US clients. The individual has formed a US LLC which he/she runs as the business entity for this service business. Services here may mean, website development, digital marketing and web management services.Looking at the above paragraph from a tax standpoint, the LLC represents a disregarded entity for tax purposes as noted in Treasury Regulation Section 301.7701-3(b). So, any profits (revenues less expenses) reported by the foreign person (“FP”) gets included on his/her 1040 Non Resident tax return.We could look at the situation as FP has non resident alien tax status given he/she has little or no physical presence in the US and has no green card (Section 7701(b)(1)(B). FP spends no more than 182 days in the US on any particular year and has a closest connection to his home country then the US as covered in Section 7701(b)(3)(B). This rule represents an exception to the general rule where the FP spends at least 31 day in the US and the weighted average days in the US over the last year exceeds 122 (subsection (b)(3)(A)). So, we are basing this analysis on FP existing in the US as non resident alien under subsection (b)(1)(B).And, services performed physically in a non US location represent foreign source income under Section 862(a)(3). While services performed physically in the US represent US source income under Section 861(a)(3).Under Section 871(b), a non resident FP gets taxed on the LLC’s profits which are effectively connected with a US Trade or Business (“USTB”). Section 875(1) provides the LLC business attributes transfer to the FP for tax purposes.First, we look to see if FP has a USTB, and then we look to see if FP has effectively connected income. The internal revenue code and treasury regulations do not define a USTB. However, the Courts over the years may look at qualitative tests such as US Bank Account, US customers, and continued activities in the US. So, FP has a USTB.Though, FP does not have effectively connected income as Treasury does not include foreign source service income in effectively connected income as noted in Section 864(c)(4)(A).Without effectively connected income, FP is not taxed under Section 871(b) on FP’s US profits. So, FP does not face federal US taxes on the LLC’s operations. However, FP still files a 1040 NR as required by Treasury Regulation Section 1.6012-1(b)(1)(i). Even with no effectively connected income a non resident tax person with a USTB has filing requirements.However, say FP travels to the US for 15 days conducting business while here. Now, FP has US source income while in the US under Section 861(a)(3). Since FP has US source income this income attaches to FB’s USTB as effectively connected income under Section 864(c)(3). Now, Section 871(b) requires FP report this profit (revenue less expenses) on a 1040 Non Resident return and pay US taxes at graduated rates under Section 1.If FP has taxable US source income, we then look for any treaty results, which may mitigate the tax requirements. As we apply tax requirements then treaty benefits. Under Article 7 of the US Model Tax Treaty, FP only reports business profits in the US if the LLC has a permanent establishment (“PE”) in the US as defined by Article 5. However, establishing a PE may result from even FP staying the same hotel while conducting business in the US. Thus, we would require evaluation for determining results here.If no PE exists, FP files a 1040 Non Resident tax return and reports $0 taxable income. The reason, FP taking a treaty position requires disclosure attached to his/her tax return as noted in Treasury Regulation Section 301.6114-1(i) & (ii). The disclosure includes the exact treaty position taken from a reading of the Treaty between FP’s country and the US. A considerable fine exists for not filing the return. Also. FP has annual reporting requirements for the US LLC under Section 6038(A) now applying to foreign owned LLCs. A $10,000 fine exists here for not complying. We would file these documents in early 2018 as part of filling the 2017 1040 NR return.What about any independent contractors contracted by the LLC — a question may arise - if the independent contractors reside in the US and FP physically operates the LLC in a foreign country for a time — does the LLC have foreign source income (as FP physically in the foreign country) or does the LLC have US source income (as the LLC’s independent contractors reside in the US)?The courts have looked at this issue. In Miller v. Commissioner, 73 T.C.M. (CCH) 2319 (1997), aff’d, 166 F.3d 1218 (9th Cir. 1998), the court respected the legal entity for sourcing rules. Since FP has a disregarded LLC for tax purposes, we would look to FP's location as the managing member of the LLC. If FP is located in a foreign country as managing member of the LLC, then FC’s business operates from the foreign location while he/she resides there. So, the independent contractors' physical location do not apply.I have drafted this analysis based on the fact situation above — any changes in fact situation may materially change results. www.rst.tax