It sounds like they treated the recipient as an independent contractor. Please click here to learn how the IRS differentiates between independent contractors and employees.
If, after reviewing the three categories of evidence in the above link, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8 can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.
Be aware that it can take at least six months to get a determination.
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