IRS Reconfirms that Musicians are Employees

At the request of Sunset Entertainment/Florida Sunshine Pops, the IRS has reconsidered a 2009 decision determining its musicians to be employees and not independent contractors, and has ruled that the original determination was correct. In a letter dated January 2011, the IRS again states that musicians working for Florida Sunshine Pops and Sunset Entertainment are employees of the companies and not independent contractors. The IRS noted that designation in a contract of independent contractor status is "irrelevant if the relationship of employer and employee exists." The IRS also considered evidence that preparation was done at the musicians' home studios, that musicians purchased their own equipment, that musicians are highly trained professionals, and that musicians work on a per-service basis for multiple employers. The IRS noted that musicians are employees if the employer has the right to direct and control the services performed, regardless of whether the employer exerts that right.

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