What is a significant worker investment and how does it affect financial control?
If a worker has invested substantial funds in his or her business (such as buying expensive equipment), it is evidence that the worker is an independent contractor. However, a worker may still be an independent contractor, notwithstanding the absence of such an investment. + Freelance typist. A freelance typist who owns nothing more than a typewriter and a telephone obviously does not have a significant investment. However, the typist may nonetheless be an independent contractor. Investment is just one factor. An independent contractor may rent needed equipment without jeopardizing his or her status. [Audit Guidelines, p 2-16.] Indeed, the rental expenses would be unreimbursed business expenses. [Q 2:19.] The real issue is what constitutes a significant investment. Here the Audit Guidelines offer little guidance. There are no precise dollar limits that must be met in order to have a significant investment. However, you must be sure that the investment has substance. Items purchased or
