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B-196064 1 (1980-11-18)

handle is hein.gao/gaobadirv0001 and id is 1 raw text is: ' THE COMPTROLLER G DECISION OF THE UNITED WASHINGTON, D. C UN I T 0 I / B-196064 DATE: November 18, 1980 MATTER OF: H.C. Wear & Associates, Inc. DIGEST: 1. Two individuals were employees of contra tor rather than subcontractors since (1) contractor did not submit DD F mr 1566, required to be submitted for al subcontractors, (2) there were no written subcontracts, (3) there is no evidence that individuals had prior experience as subcontractors, separate places of business, their own equipment or other indicia of bona fide subcon- tractors such as company checks and stationery, and (4) neither individual indicated that he considered himself to be subcontractor and one individual specifically denied he was subcontractor. Therefore, employees of alleged subcon tractors were, in fact, employees of contractor for wages tax purposes. 2. Government (IRS) has common law right to set off debts owed to it by contractor against funds, in its hands, belonging to contractor. By letter of September 25, 80, counsel for H.C. Wear & Associates, Inc. (Wear), requested reconsidera- tion of our Findings of January 3, 1980, which led to arequest by the Internal Revenue Service (IRS) that Wear pay the employer's share of the Federal Insurance Contribution Act (FICA) tax due on back wages paid to five Wear employees.) Wear argues that since the five individuals were not its employees, but rather employees of subcontractors (Guy Miller and Ray Hamilton), it (Wear) should not be liable for the employer's share of the FICA tax. ft = LE /4fY'p ENERAL BTATES . 20548 I :

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