Should Hiring Firms Use Written IC Agreements?
Absolutely. An oral agreement isn’t worth the paper it’s printed on. Using a written agreement avoids later disputes by providing a written description of the services the IC is to perform, when they are to be performed and how much the IC will be paid. A written IC agreement can also help establish a worker’s IC status. Although an agreement by itself is never enough to make a worker an IC, it will help show the IRS and other agencies that both you and the worker intended to create a hiring firm-IC relationship, not an employer-employee relationship. Newly published IRS training materials state that where all the other factors are evenly balanced, a written IC agreement may tip the scale to the IC side. But remember, an IC agreement is only useful if it’s obeyed. It will be useless if you treat a worker like an employee.
