SUBJECT: FEDERAL TAXES: CONTRACTORS AND NONRESIDENT ALIENS

RESPONSIBLE OFFICE: Office of Fiscal Affairs

I. SCOPE

The policies provided herein apply to all George Mason University organizations, faculty, staff and students. Administrative Policy Number 52 applies to all George Mason University locations, owned and leased, including the Fairfax Campus, the Arlington Campus, GMU at Prince William, and GMU at the Center for Innovative Technology. Furthermore, although a separate agency, this administrative policy applies to the George Mason University Foundation. Doing so facilitates standard practices to conform with the Internal Revenue Code. Using joint operating policies and procedures reduces the opportunity for inadvertent violations of the Virginia Conflicts of Interests Act.

This administrative statement establishes policy and provides guidance regarding certain federal tax laws and regulations. The principal areas of interest are:

1.     Hiring:  Distinguishing between individuals who are employees and
                                   independent contractors.

2.     Taxes:  Complying with withholding and reporting requirements
                                   concerning nonresident aliens.

Hiring personnel are responsible for defining the work individuals are to do and for properly classifying them as employees or contractors. Hiring personnel should also assist students and workers (especially nonresident aliens) in complying with U.S. tax laws and regulations. The Human Resources (HR) and Fiscal Services (FS) departments (Materiel Management and Accounts Payable), the Financial Aid Office and the George Mason University Foundation have supplemental guidance and procedural information; and maintain systems to employ, contract, pay, and report relevant information.

People wishing to hire an individual or contract for services need to be aware that compliance with the Internal Revenue Code and with IRS regulations often involves considerable paperwork and advance planning. Engaging a nonresident alien - either as an employee or as a contractor - is particularly laden with paperwork.

A.   Twenty Factors for Proper Classification of Workers

 
1.   Establishing Control

When deciding whether an individual worker is an employee or independent contractor for wage withholding purposes, the IRS typically applies the common law test of control. Under this test, if the payer has the right to control and direct what a worker does and how he/she does it - whether or not exercised - an employer-employee relationship exists. Without such control, aworker may be classified as an independent contractor. Independent contractors are workers who are subject to the control and direction of another only as to the results of their work, not as to the means.

Although the idea behind this test is simple, application of the rule is not always clear. To decide if control exists in an employer-employee relationship, the IRS uses the 20 common law factors set forth below. These factors have evolved over the years and are based on issues considered by the courts in determining whether an employer-employee relationship exists. The degree of importance of each factor varies depending on the occupation, the factual context in which the services are performed, and (occasionally) the IRS examiner making the determination.

No mathematical formula or weighting system can be applied to these factors. Often the issue of control is based on the preponderance of the 20 common law factors. Appendix I contains interpretations of these 20 factors. Examples of their application are in Appendix II.

Individuals needing to hire a worker must complete the evaluation form on the next page to find the degree of control. Incorrectly classifying an employee as a contractor exposes GMU to significant IRS imposed taxes, interest, and penalties. Conversely, erroneously classifying a contractor as an employee could result in violation of Commonwealth statutes concerning competition, entitle the individual to inappropriate benefits, etc.

First time users of this evaluation form should review appendices I and II before completing the form. Often the full implications of the 20 factors cannot be discerned without reviewing the definitions and examples in the appendices.

Completion of the evaluation form is the basis for deciding if GMU will engage the worker as an employee or as an independent contractor.

1. If the individual is to be an employee, submit the appropriate paperwork (e.g.,PAF, TER, etc.) to HR for recruiting.

2. If the conditions warrant a contractor, complete the enclosed evaluation form and forward it to Materiel Management or the George Mason University Foundation with appropriate backup.

B. Notes and Cautions
 

1. Do not fill out the evaluation form on the next page if the intended worker is already a GMU/GMUF employee. Additional work to be performed by an existing employee requires that he/she be engaged as an employee.

2. The evaluation form that follows does not have to be submitted to HR. However, take care to avoid unnecessarily hiring an individual as an employee since this could (1) violate competition statutes, (2) cost GMU/GMUF extra money for fringe benefits, (3) expose GMU/GMUF to unemployment benefits, etc.
GEORGE MASON UNIVERSITY
EMPLOYEE/INDEPENDENT CONTRACTOR EVALUATION FORM
Services to be obtained:

If the University already employs the person you are considering, stop now. (He/she cannot be paid as a contractor.) Otherwise, answer each of the following questions. If the question is not applicable, mark it as "n/a." University, as used below, refers to the office/officer/principal investigator who has responsibility for the activity which requires this service. The IRS generally considers workers to be employees if they:
 

YES NO N/A

1. Work substantially full-time for the University.

2. Must comply with the University's instructions about where, when and

how the work is to be performed.

3. Receive training from or at the direction of the University.

4. Provide services that are integrated into the regular activities of

the University.

5. Provide services that must be rendered personally.

6. Do not hire, supervise and pay their own assistants.

7. Have a continuing relationship with the University.

8. Must follow hours of work set by the University.

9. Do their work on the premises of the University.

10. Must do their work in a sequence set by the University.

11. Must submit regular reports to the University.

12. Receive payments of regular amounts at set intervals.

13. Receive payments for business and/or traveling expenses.

14. Rely on the University to furnish tools and materials.

15. Lack a major investment in facilities used to perform the service.

16. Cannot make a profit or suffer a loss from their services.

17. Work for one employer at a time.

18. Do not offer their services to the general public on a regular

and continuing basis.

19. Can be fired by the University.

20. May quit work any time without incurring liability for nonperformance.

Evaluation: The questions above are intended to measure the extent of control which the University may exercise over theworker. Generally, if there is a good deal of control over what the worker does and how the worker does the work, there shouldbe an employee relationship established. If there are few elements of control, a contractor (consultant) relationship may be appropriate.

CERTIFICATION: Based on the above, it is my determination that the desired service should be most properly obtained from ahired employee or contractor (circle one). I acknowledge that the University may hold my department financially responsiblefor any additional taxes, interest and penalties that the IRS may assess due to misclassification.

C. Hiring an individual who is already an employee of GMU, GMU or another Commonwealth agency: Potential conflicts of interests
 

The Virginia Conflicts of Interests Act limits George Mason University's ability to hire someone that is already on the State payroll. A brief overview of the restrictions and GMU's policies is given below. An excerpt from the Act is at Appendix III.

1. GMU and GMUF Employees

Except as noted in paragraph 2 below, GMU will not enter into contracts for additional services with its own employees or those of its foundation. If special conditions warrant having an individual work two jobs, GMU will place that person on the payroll in both cases. Supervisory personnel will closely monitor these situations to preclude even the appearance of an impropriety. At a minimum, supervisors will take care to ensure work periods do not overlap, that all work is performed on GMU controlled property, that appropriate supervision is maintained, and that the nature of the work is different.

2 . Research and Development Contracts

The Virginia Conflicts of Interests Act permits research and development contracts between universities and their employees in certain situations. See GMU Inter-Office Memorandum, Revised Conflict of Interest Policy, April 19, 1993 for details.

3. Other State Employees
 

GMU and GMUF may employ or enter into contracts with other employees of Virginia provided they comply with the Conflicts of Interests Act. The determination of whether the situation calls for an employee or contractor is contingent upon the element of control as manifested by the 20 common law factors. While hiring an existing State employee as a GMU employee does not require any actions or determinations not required in hiring an individual who is not already a State employee, contracting with a State employee or his/her firm requires compliance with the provisions of the Conflicts of Interest Act if the employee has a "personal interest" in the contract. Personal interest generally means an investment greater than 3% or a salary greaterthan $10,000. These situations require either a competitive award processor a written finding by the President.

A. Contractors and Employees

Generally, follow the guidelines outlined in the preceding chapters to decide employee/contractor status. GMUF has adopted the University's guidelines both to simplify the matter for departments and because these guidelines follow IRS rules and regulations. Please be aware of the following administrative differences. All workers classified as employees must be paid through GMU's payroll department on a ledger 5 account on a monthly basis. Your Foundation account reimburses ledger 5 account for payments made to employees. GMUF requires that GMU's Employee/Independent Contractor Evaluation Form (page 4) be filled out, signed, and submitted with any vouchers requesting payments to workers classified as independent contractors. All independent contractors must have a valid federal ID number to be paid. If they do not, they must submit Form SS-5 to the local Social Security Administration office at least 10 days before the request can be submitted for payment. IRS Form W-9 must be included with all payment requests submitted by GMUF.

All payments will be made directly to the contractor. There will be no reimbursements to individuals who pay the contractor and then file for reimbursement. Please call the Foundation office for assistance if there are any questions regarding this policy.

B.    Nonresident Aliens

GMUF does not process any payments to nonresident aliens. All payments (including travel reimbursements) must be made by GMU with reimbursement of the University by the Foundation when appropriate. This approach eliminates the need for both institutions to maintain complex, time-consuming systems for relatively few payments.

A.    Stipends

Stipends are "fixed and regular payments" such as salaries for services rendered. Stipends paid for services rendered are reportable on a Form W-2 ff the individual is considered an employee. Normal withholding occurs under these circumstances.

Stipends paid to students and athletes for expenses such as room and board should be reported by the recipient on a federal tax return as taxable income. GMU does not file Forms W-2 and 1099 for stipends paid to U.S. citizens and resident aliens under these conditions.

B.    Honoraria

Honoraria are "payments given to professional persons for services for which fees are not legally or traditionally required." For U.S. citizens and resident aliens, these payments are reportable if the dollar limit of $600 is met or exceeded for the calendar year. Form 1099-MISC is used.

A.    Employees and Contractors

Departments contemplating hiring nonresident aliens must allow extra time for the extra paperwork necessary to pay nonresident aliens. GMU/GMUF will not bypass IRS regulations by hiring before compliance with Internal Revenue Code provisions. The burden of proof for supplying the required documentation rests with the individuals wanting to be hired. Contractors must provide GMU/GMUF with a completed Form W-9 before payments can be made. A decision logic table summarizing nonresident alien tax processing is at Appendix IV; a more detailed schedule is at Appendix V. Normal Internal Revenue Code provisions and IRS regulations may be superseded by tax treaties the United States enters into with other countries. A listing of these treaty countries is at Appendix VI. A listing of visa categories and a brief description of each (including employment eligibility) is at Appendix VII.

B.    U.S. Citizens

1.    Employees:  The Human Resources Department satisfies code requirements
                  using the Human Resource System and information provided by the
                  employee.  HR accepts proof of citizenship in good faith unless GMU officials
                  have reason to suspect its authenticity.  W-2s and other forms are used to
                  report an employee's income and tax withholding.
2.    Contractors:  Materiel Management enters into contracts with
      individuals for GMU.  Accounts Payable pays these vendors.
      Accounts Payable uses Form 1099-MISC to report payments for
      services rendered aggregating $600 or more per calendar year.

C.    Resident Aliens

A resident alien is an individual who is a lawful permanent resident of the United States (possesses a "green card" - which is actually pink), meets the "substantial presence" test of the Internal Revenue Code, or makes a first- year election to be treated as a U.S. resident. The substantial presence test requires the individual to be present in the U.S. at least 31 days during the current calendar year, and at least 183 days during the three-year period including the current year.

GMU reports payments made during a calendar year to resident aliens on Forms W-2 and 1099. Resident aliens are subject to U.S. tax rates for income earned in the U.S. Resident aliens may be engaged as employees or contractors using the same criteria as for U.S. citizens. Other provisions are also the same as those for U.S. citizens.

D.    Nonresident Aliens.  (See also IRS Publication 515)

1.    General provisions:  Nonresident aliens are individuals who are neither U.S.
citizens nor resident aliens. In general, any salary, wage, compensation or remuneration paid to a nonresident alien as a personal services contractor is subject to 30%% withholding; employees' withholding is subject to graduated withholding rates the same as U.S. citizens and resident aliens. A nonresident alien may claim exemption from withholding or may claim a reduced withholding rate by virtue of a tax treaty between his/her country of residence and the U.S. This is especially true of teachers, researchers, entertainers, athletes and students. In addition, residents of Canada and Mexico may be exempt from withholding. GMU reports payments to nonresident aliens using Forms 1042 and 1042S. To effectively comply with the code and IRS regulations, GMU abides by the following:

a.    GMU requires a nonresident alien rendering services to provide a social
security number (individuals) or other federal tax identification number (firms).
b.    Nonresident aliens are paid in the U.S. using instruments denominated
                        in U.S. currency.
c.    GMU pays individuals directly, not through intermediaries (e.g.,
                        sponsoring GMU departments or employees).
GMU requires that nonresident aliens supply social security numbers. If they do not already have one, they may obtain one by appearing before the local office of the Social Security Administration and presenting Form SS-5 and required supporting documentation.

2.    Employees.  There is no prescribed form for claiming exemption from
withholding. Instead the employee must file a dated statement with GMU. This statement must contain the following: the name, address, and employee's taxpayer identification number. It must certify that:

a.    The individual is not a citizen or resident of the U.S., and
b.    The compensation to be paid during the tax year is, or will be, exempt
                        from income tax, giving the reason for the exemption.
The statements also must show:

1.    the provision and tax treaty under which exemption is claimed,
2.    the country of which the employee is a resident,
3.    enough facts to justify the claim for exemption,
4.    the tax year for which it applies,
5.    the compensation to which it relates,
6.    the signature of the employee entitled to the compensation, and
7.    a written declaration that it is made under the penalties of perjury.

The duplicate copy of each statement must be attached to the Form 1042 that GMU files with the IRS.

3.    Independent services contractors:  GMU is not required to withhold taxes from compensation paid for personal services of nonresident alien personal services contractors if the compensation (1) is effectively connected with the conduct of a trade or business in the U.S., and (2) such compensation will be exempt because of a tax treaty to which the U.S. is a party, or by reason of a provision of the IRC, etc. This category of nonresident alien uses a Form 8233 to claim exemption from withholding. GMU must examine the statement to satisfy itself that an exemption from withholding is warranted. GMU will not accept Form 8233 and must withhold at the 30%% rate if it knows or has reason to know that any of the facts or assertions on Form 8233 may be false or if the eligibility for exemption of the individual's compensation cannot be readily determined. If an exemption from withholding is warranted, GMU must accept Form 8233, complete Part II and forward one copy to the IRS within five days of acceptance. The exemption from withholding becomes effective for payments made at least 10 days after GMU completes and submits a copy of Form 8233 to the IRS.

4. Reduced withholding under tax treaty: In lieu of tax exemption (described above) the United States enters into tax treaties with certain countries to permit a reduced rate of income tax withholding. To obtain the benefit of withholding at the reduced rate, a nonresident alien employee must modify the above described statement to claim reduced withholding rather than exemption. A contractor has to modify lines 3c and 3c1 of Form 8233 to claim reduced withholding.

5. Special provisions for residents of Canada and Mexico: GMU is not required to withhold taxes from compensation paid for personal services of a nonresident alien if such compensation is "effectively connected" with the conduct of a trade or business within the United States and it is for services performed by a resident of Canada or Mexico who enters and leaves the United States at frequent intervals. However, if such individual resides in the U.S. for more than 183 days, GMU must withhold and issue a W-2.

E.    Reference Materials

Three IRS publications are particularly useful with regard to nonresident alien tax matters. These publications are: Withholding of Tax on Nonresident Aliens and Foreign Corporations (Publication 515), U.S. Tax Guide for Aliens (Publication 519), and U.S. Tax Treaties (Publication 901). As with many other IRS publications, these three are usually revised annually. A more complete listing of IRS publications and forms is at Appendix VIII.

F.    Other Situations

The federal tax code is extremely complex. Departments should contact the appropriate staff functions for guidance and assistance before proceeding with hiring beyond the scope of the parameters discussed above.

G.    Students (Scholarships and Fellowships)

The Internal Revenue Code contains specific provisions regarding the reporting and taxing of the above payments. These provisions are summarized below. Employee tuition waiver programs are outside the scope of this administrative policy statement. Contact Human Resources or see AP 32 for information on employee tuition waivers.

1.    Scholarships
Scholarships are amounts paid to, or for the benefit of, students at educational institutions to aid in the pursuit of studies. The student may be either an undergraduate or graduate. The Code states that payments received from a "qualified scholarship" (academic assistance awarded to a qualified degree candidate attending an accredited institution) are not reportable if the recipient uses the amount received to pay for tuition, fees, books, and any equipment that the course of instruction requires. The IRS does not require the reporting of such payments to U.S. citizens and resident aliens. Conversely, all amounts paid to or on behalf of nonresident aliens are reportable.
2.    Fellowships
Fellowships are amounts paid or allowed to, or for the benefit of, an individual to aid in the pursuit of study or research.
3.    Scholarship and Fellowship Grants

a.    U.S. citizens and resident aliens:  Scholarship and fellowship grants
that are used for incidental expenses, such as room, board, and travel are to be reported by the recipient as taxable income. For U.S. citizens and resident aliens there is neither a requirement nor a mechanism for the payer to report this income to the IRS unless the payment is for services. It is GMU policy that in accordance with good business practice and the desires of the State, the administrator of the grant (e.g., the Director of Student Financial Aid) will advise, in writing, the recipient of the award of its tax status.
b.    Nonresident aliens:  Under the Immigration and Nationality Act,
qualifying scholarships and fellowships received by nonresident aliens are exempt from tax as long as the recipient is a candidate for a degree at a qualified educational institution. However, the payments (or waivers) are reportable in Form 1042S. Furthermore, unless exempted by the IRC or treaty, payments for (or waivers of) other than tuition, fees, books and equipment required for enrollment or attendance in a course of instruction are subject to tax and withholding thereon. If the student is a nonresident alien and is not seeking a degree, then the entire scholarship or fellowship grant is subject to a 14%% withholding tax and is reported to the recipient on Form 1042S.

c. Payment for services: In situations where the recipient is teaching, or performing research or other services as a condition for receiving the scholarship or fellowship grant, the income is taxable and the payer should report them on a W-2 return. All payments received for services must be included in income, even if the services are a condition of receiving the grant and are required of all candidates for the degree. This includes amounts for teaching and research. Form 1099 instructions state that the taxable portions are reportable on Form W-2, not on Form 1099-MISC. Nonresident aliens must file a Form 1040NR to report all income (including scholarships and fellowships).

H.    Tax Reference Materials

1.    IRS Publication 520, Scholarships and Fellowships, is written for the
recipients of the grants, and explains how and when to report the income on their individual income taxes. The publication provides some insight for the payer of these grants about what is taxable and reportable to the recipient. Publication 520 lists the following government programs that are considered scholarships or fellowships:

Survivors' and Dependent's Educational Assistance benefits.

Student loan interest subsidy payments made by the U.S. Department of Education.

National Research Service awards received by individuals under the Public Health Service Act of 1974.

Public Health Service awards to students enrolled in advanced courses of training for professional nurses are scholarships.

2.    U.S. Taxation of International Students and Scholars - A Manual for
Advisors and Administrators.

NAFSA: The Association of International Educators publishes this informative handbook. The address and telephone number are:

1875 Connecticut Avenue, N.W. Suite 1000 Washington, D.C. 20009-5728 Telephone: 202 462-4811
3.    U.S. Federal Income Tax Guide for International Students and Scholars.
This publication is also available from NASFA at the above address and telephone number.

I.    Immigration & Visa Information Resources

Immigration and Naturalization Service (INS)

Handbook for Employers: Instructions for Completing Form I-9.

American Council on International Personnel, INC.

Immigration Handbook: Employment of Foreign Nationals Avoiding Immigration Related Employment Discrimination Manual

A.    Liabilities

A payer that erroneously classifies employees as independent contractors may be subject to an assessment for the underpaid taxes, interest, and penalties. A payer is not entitled to recover from an employee or former employee any amount assessed. Additionally, it may not credit income taxes paid by the worker against its own income tax liability. A payer that intentionally disregards withholding requirements may face an even greater burden.

Liability Due to Type of Tax	Liability Due to Erronious Classification	Liability Due to Intentional Classification
Income	1.5% of wages	The full amount that

(3%% if the required should have been with-Forms 1099 were held on an employee's not filed unless wages such failure was due to reasonable cause)

Type of Tax	Liability Due to Erronious Classification	Liability Due to Intentional Classification
FICA (Social Security)	The full amount of the employer's portion plus 20% of the employee's portion (40% if the required forms 1099 were not filed unless such failure was due to reasonable cause)	The full amount of the employer's portion plus the full amount of the employee's portion

B.    Penalties

Whether erroneous or intentional, misclassification of workers also may subject a payer to penalties, such as those for failure to pay tax due, and for failure to deposit the employer's portion.

All amendments and additions to this Administrative Policy are to be reviewed and approved by the Provost, the Executive Vice President for Administration and the Executive Vice President for Finance and Planning.

The policies herein are effective April 1, 1994. This Administrative Policy shall be reviewed and revised, if necessary, annually, to become effective at the beginning of the University's fiscal year, unless otherwise noted.

APPENDIX I

ANNOTATED FACTORS FOR PROPER CLASSIFICATION OF WORKERS
This section provides amplification on the 20 common law factors listed in Section I.

1. Full time required. If the worker must devote full time to the payer's business, the payer has control over the worker's time and by implication restricts the worker from other gainful activity. An independent contractor is free to work when and for whom he/she chooses.

2. Instructions. A worker who is required to comply with instructions about when, where, and how to work is ordinarily an employee. The control factor is present if the payer has the right to require compliance with the instructions. The instructions which show how to reach the desired results may be oral or written.

3. Training. Training a worker indicates that the payer exercises control over the means by which the result is accomplished. Training can include supervision, correspondence with the worker, meetings, etc., to ensure completion of a job in a particular method or manner. An independent contractor ordinarily uses his/her own methods and receives no training from the purchaser of his/her services.

4. Integration. When the success or continuation of a business depends to an appreciable degree on the performance of certain services, the worker performing those services is deemed to be subject to a certain amount of control by the owner of the business.

5. Services rendered personally. If the services must be rendered personally, the payer presumably is interested in the methods used to accomplish the work as well as the results. If the worker performs the same type of work that is generally performed by the payer's regular employees and generally works side by side with regular employees, it is likely he/she is also an employee.

6. Hiring, supervising, and paying assistants. Control is exercised if the payer hires, supervises, and pays assistants. If the worker has the right to bring in someone else to do the work or assist in the work, he/she is probably an independent contractor. If one worker hires and pays other workers and he/she is responsible for only attainment of a result, the payer/worker is an independent contractor, the payee workers are his/her employees. Any contract to evidence independent contractor status should state that the worker/contractor has the right to use whomever he/she pleases to accomplish the purpose of the contract. This provision helps establish the assistants as the worker's/contractor's and not

the payer's employees. The contract should also provide that the worker/contractor will treat his/her assistants as employees and comply with all tax requirements

7. Continuing relationship. An employer-employee relationship exists if the worker provides services of a recurring type and kind regularly over an extended period. An employee relationship is generally continuous and indefinite. An independent contractor is generally engaged for the length of time necessary to complete a specific job.

8. Set hours of work. Hours of work set by the payer indicates control and prevents the worker from being master of his/her own time, one of the rights of an independent contractor.

9. Doing work on the payer's premises. Requiring the worker's physical presence indicates control, especially when the work is the kind that could be done elsewhere. Control over the place of work is indicated when the payer has the right to compel a person to travel a designated route, to canvass a territory within a certain time, to follow up and report on leads, or to work at specific places as required.

10.Order or sequence set. A worker who is not free to choose his/her own pattern of work but must perform services in the sequence set by the payer is subject to the payer's control.

11. Oral or written reports. Control is exercised by a purchaser of services if the worker must render frequent reports.

12. Payment by hour, week, or month. Period-based compensation generally indicates an employer-employee relationship, provided this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of doing a job. Payment made by the job or on a straight commission generally indicates that the worker is an independent contractor.

13. Payment of business or traveling expenses. Another indication of an employer-employee relationship is reporting and reimbursing of the worker's expenses. An independent contractor pays for his/her own expenses including licenses and registrations.

14. Furnishing tools and materials. If the payer furnishes significant tools, materials, and other equipment, an employer-employee relationship usually exists.

15. Significant investment. A worker may be independent contractor if he/she invests in facilities that are not typically maintained by employees (e.g., the maintenance of an office rented at fair value from an unrelated party). An employee depends on the payer for such facilities. The IRS accords little weight to an investment for which the payer is liable, where the worker's equity is small, and the item is being purchased "on time" with periodic payments. To determine whether an investment is adequate, the Service compares the value of the investment to the total value of all of the facilities needed for doing the work.

16. Realization of profit or loss. An independent contractor has an opportunity for a profit and bears risk of loss. The opportunity for profit or loss can be established by the fact that an individual hires, directs, and pays assistants; by the fact that an individual has an office, equipment, materials, or other work facilities; by the fact than an individual has continuing or recurring liabilities or obligations, and success or failure depends on the relationship of receipts and expenditures; by the fact that an individual agrees to perform specific jobs for prices agreed upon in advance and pays expenses incurred in connection with the work; and by the fact that the quality of individual's services and those of his/her assistants establish or affect the service provider's business reputation and not the reputation of the purchaser of the services.

17. Working for more than one firm at a time. If a worker performs more than de minimis services for a number of unrelated payers at the same time, he/she is usually an independent contractor.

18. Making service available to the general public. A worker is usually an independent contractor if he/she makes services available to the general public on a regular and consistent basis. This would involve an office, possibly assistants, business licenses, listings in business directories, and advertising.

19. Right to discharge. The right of the payer to discharge a worker without civil liability for lost profits indicates that he/she is an employee. The payer exercises control through the threat of dismissal. Without being given notice, an independent contractor cannot be "fired" so long as he/she produces a result which meets contract specifications.

20. Right to terminate. The worker's right to quit without civil liability for additional costs incurred by the payer is indicative of employee status. An independent contractor usually agrees to complete a specific job; he/she is responsible for its satisfactory completion or legally obligated to make good for failure to complete.

EXAMPLES OF APPLICATION OF THE 20 FACTORS
This section presents examples of the IRS' application of the 20 common law factors for determining control. Most are drawn from private letter rulings (PLR's). Although PLR's do not constitute precedent applicable to other payers, they provide insights into how the Service applies to the 20 common law factors.

Higher Education Situations

1. Attorneys teaching classes. The IRS ruled that attorneys engaged to conduct classes in a private law college were employees of the college. The instructors were included in the college catalog as faculty members, were required to teach any students assigned to their classes, were required to give written examinations and grades in accordance with the college's system, and were permitted to provide substitutes only if such substitutes had certain qualifications. Although the instructors were outstanding members of the legal profession, the IRS reasoned that the contracts for their services were with reference to the regular business of the college, and they were not engaged in an independent calling as far as their relationship to the college was concerned. (Revenue ruling 70-363)

2. Adjunct faculty. The IRS held that various groups of adjunct faculty at a private university were employees, rather than independent contractors. The university involved in this ruling had regular faculty and three groups of adjunct faculty: undergraduate, graduate and law school. The university treated its regular faculty and graduate adjunct faculty as employees, but treated the undergraduate and law school adjunct faculty as independent contractors. The IRS ruled that those two groups of adjunct faculty also were employees.

A key factor was the integration of the adjunct faculty services into the university's business. At the main campus, the law school adjunct faculty taught the same courses, with the same books and under the same guidelines as members of the regular faculty. Similarly, the courses, books and guidelines for members of the undergraduate adjunct faculty teaching at the university's off- campus site were the same as those for the regular faculty at the main campus. The degree of integration was emphasized by statements in the university's guidebook that there would be no difference between courses taught at the off- campus site and those taught at the main campus, and also that although some faculty members were designated as adjunct faculty, only university courses were taught.

The IRS cited other specific factors to support its decision:

The university provided equipment and materials to the adjunct faculty, recommended particular textbooks to be used in courses, and determined the hours of instruction;

Courses were taught by adjunct faculty at "regular intervals" during the contract period, suggesting a "continuing relationship" between the adjunct faculty and the university;

The adjunct faculty were required to perform teaching services personally or obtain a substitute approved by the university;

The university could terminate an adjunct faculty member effectively with no further liability to that person; and

The adjunct faculty members were subject to evaluation and further approval before their contracts were renewed.

The evaluation process, the approval requirement for contract renewals, the duration of the oral contracts, and the university's ability to dismiss an adjunct faculty member gave it sufficient authority to require the member to comply with the university's instructions.

The university's relationship with adjunct faculty differed significantly from its relationship with regular faculty, in ways that arguably pointed toward independent contractor status. Adjunct faculty were hired only for a particular course and term, were compensated by the course in a lump sum, received no fringe benefits, received separate compensation for working with a student on independent study, were not paid for a course canceled because of low enrollment, were not compensated for counseling students, were not provided with offices or other space for course preparation, were subject to only informal student evaluations, and did not participate in the academic business of the university. However, these factors applied not only to the law school and undergraduate adjunct faculty, but also to the graduate adjunct faculty who were classified by the university as employees. The IRS stressed this similarity between the difference groups of adjunct faculty and was not inclined to classify them differently. (PLR 8925001)

3. Part-time instructors. The IRS applied the common law factors in concluding that part-time instructors at a public community college were employees, not independent contractors. Most of the instructors held other full-time jobs and taught only one course during the semester. The college did not have a main campus, and classes were held at various community buildings. The college did

not prescribe course content, although instructors in core courses were required to meet basic course objectives. The instructors were paid a flat amount per course in two lump sum installments. The college could terminate the instructor if he/she breached the conditions of the professional services agreement. However, if the college terminated the instructor without cause, it had to pay him/her for the full semester.

Notwithstanding these facts, the IRS relied on other factors in finding the instructors to be employees. The instructors had to meet with a college representative for course planning and had to comply with college rules and regulations. Their services were an integral part of the college's business and were expected to be provided personally. Courses were taught "at regular intervals during the contract period." The college set class schedules, required the instructors to submit attendance and grade reports, and furnished the copying machines, computers and other equipment needed. The instructors had no investment in facilities and were not compensated based on profit or loss. (PLR 9105007)

4. Principal investigators. The question of employment status also has arisen where professors perform research under grants and hire others to assist them. One case involved a professor employed to teach at a state college and designated by the college to carry out a research project under a foundation grant. The professor continued to draw his salary as a professor and received additional compensation from the grant funds for time spent on research in excess of his regular teaching time. The professor hired and supervised a stenographer who was paid by the college out of grant funds. The IRS held both the professor and the stenographer were employees of the college. (Revenue ruling 55-583)

5. Student aids. A private university has an internship program where PU's students perform services as substitute teachers or teacher's aides. PU receives payment for the student's services and the students receive paid tuition and fees for books and supplies. The IRS held that the students were PU's employees. (PLR 9216021)

6. Drivers Ed instructors. In connection with the state department of motor vehicles and the division of alcohol abuse, an institution of higher learning offered a driving course for persons convicted of DWI. The institution (L) contracted with instructors (I) and stipulated they were to be treated as an independent contractors. Any I could hire substitutes or helpers. The contract stated that L did not provide staff support, office space, or supplies; but in fact L did so. The IRS considered I an employee of L. (PLR 8951039)

Other Examples

1. A bassoon player. A musician (B) was hired on a concert-by-concert basis by O, a nonprofit organization. O does not train B, but instructs and supervises through its orchestra director. O requires B to be at rehearsals and concerts on time, and has first call on his services. B provides his own bassoon and concert attire. B is free to compete with O and advertises for similar engagements. The IRS ruled that O exercises the degree of control indicative of an employer- employee relationship. (PLR 9123010)

2. Psychologists. Doctors who provided services to patients of Clinic, as assigned by Clinic, in offices of Clinic on specified days are employees of Clinic, even though they also maintain private practices and hold themselves out to the public as performing for their own account, the same services provided for Clinic. (PLR 8937039)

3. Reader to the blind. An individual read to a blind attorney from law books, files and briefs. She did not work full-time, had no benefits, but did perform the services personally, in the firm's offices. The IRS said she is an employee. (PLR 9050010)

4. An accountant. An accountant was engaged pursuant to a written contract designating him as an independent contractor or consultant. The arrangement lasted 3 1/2 months and required full-time services. The payer instructed, set routines, reviewed the work, and had the right to change methods. The accountant was paid on a per diem basis with no benefits. Either could terminate. The accountant was an employee. (PLR 8947033)

5. Workshop teachers. F, which operates summer workshops for teachers, hired W to teach several workshops in chemistry and computer usage to high school teachers. F provided all materials and equipment, and the teaching sites. F instructed W as to what to teach and when to teach it, required W to adhere to a syllabus, and retained the right to change W's work methods. W did not perform similar services for others while working for F, and had no investment in a business relating to services performed for F. The IRS held W to be an employee of F. (PLR 9038035)

6. Municipal court judges. Perrsyburg city council established a municipal court which is part of the state's unified judicial system. Its judges are appointed pursuant to a state statute and take an oath of office prescribed by the state constitution. The judges hold court daily, and receive a monthly salary from Perrsyburg, which is paid to the law firm in which they are partners. Perrysburg provides the court building and its facilities and supplies, as required by state statute. Perrysburg also pays clerks and nonjudicial support personnel. The judges cannot incur a loss in working for Perrysburg. They do not perform similar services for others. Since they are required to perform their services personally and take their oath of office personally, the IRS found that the judges are working for the city in their personal capacities and not as partners of their partnership. The payment of their salaries to the partnership does not convert the salaries to partnership income. (PLR 9236022)

7. Sole officer/employee of consulting firm. An individual (W) is president, principal shareholder and sole employee of a company (C) which has contracted with a technical services placement firm (F) to provide services to a nuclear power plant (X). W teaches candidates for nuclear operator licenses how to operate the reactor. W follows a schedule established by X, reports to a supervisor X, is expected to perform his services personally, may terminate his arrangement at any time without incurring liability, was trained by X, uses tools, materials and office space provided by X, and cannot incur a loss. W is an employee of X, not of either C or F. (PLR 88447007)

8. Medical director. A rural health district funded with state, county, and city taxes engaged a medical director/health officer under a written contract. The director (MD) is responsible for developing and implementing the administrative apparatus for coordinating official district health activities. The contract, which designates MD as an independent contractor, provides that MD will provide his services through his own incorporated professional association. MD will make periodic reports to the board of directors. MD is provided with a fixed annual salary without fringe benefits. MD is reimbursed for travel expenses at the rate used to compensate state employees for travel expenses. MD works without direct instructions or supervision. MD conducts his own private medical practice, but any helpers used by MD to perform services for the district are hired and paid by the district. In making the determination, the IRS noted that professional employees often cannot be subject to as much control by their employer as nonprofessional employees, and determined that MD is an employee. (PLR 9215038)

9. Emergency room staffers. A professional medical corporation provides emergency room services, engaging workers pursuant to an oral agreement. Workers are engaged to provide services for a specific shift and may be fined if that shift is missed, but they are free to select the shift they prefer. Workers' services must be performed personally, although they may find a replacement from other workers who perform services for the hospital. The workers are paid weekly for the time worked. All tools, equipment, materials, and supplies n by the workers are provided by the hospital except for personal hand tools. The workers are employees of the professional medical corporation. (PLR 9236004)

10. Nurses. A manufacturer of telephone equipment engages nurses to provide care for its employees, to conduct audio and orthorator testing, to maintain medical records, and to perform certain other medical procedures. The nurses work pursuant to contracts which identify them as consultants and independent contractors. The agreements prohibit the hiring of substitutes by the nurses, permit either party to terminate the relationship after two weeks notice without incurring any liability, and require the nurses to buy malpractice insurance in stated amounts. The nurses are compensated with an hourly wage with no guarantee of a minimum amount of pay and no fringe benefits. They are permitted to perform similar services for others, but do not advertise or otherwise attempt to do so. They have no financial investment in a business relating to the work they do for the manufacturer. The IRS decided the nurses are employees. (PLR 9041007)

11. Dental consultants. A national insurance company (NIC) developed a program to provide prepaid dental services, by participating dentists, under a dental coverage plan. NIC contracted with consultants it calls "state dental directors" to get the new product known to dentists. The product is now available in 45 states. The state dental directors must have an unrestricted license to practice dentistry in their geographical area but they need not actually practice dentistry. They work part-time out of their own homes or dental offices and have no set hours or schedules. They are paid based on a fee or retainer plus an incentive commission. The IRS concluded that the directors are employees. They are not, in this case, practicing dentistry; and their work is controlled by the insurance company. The dental consultants bore no risk of suffering a loss, and did not bear the major expenses of the business. Furthermore, the performance of services did not qualify as carrying on a trade or business, and the services they performed were an integral part of the company's business. (PLR 9236006)

EXCERPTS FROM THE VIRGINIA CONFLICTS OF INTERESTS ACT
Article 2.1-639.6. Prohibited contracts by officers and employees of state government.

A. No officer or employee of any governmental agency of state government shall have a personal interest in a contract with the governmental agency of which he is an officer or employee, other than his own contract of employment.

B. No officer or employee of any governmental agency of state government shall have a personal interest in a contract with any other governmental agency of state government unless such contract is:

 
(i) awarded as a result of competitive sealed bidding or competitive negotiation as defined in Article 11-37, or

(ii) awarded after a finding, in writing, by the administrative head of the governmental agency that competitive bidding or negotiation is contrary to the best interest of the public.

Article 2.1-639.2. Definitions.

"Contract" means any agreement to which a governmental agency is a party, or any agreement on behalf of a governmental agency which involves the payment of money appropriated by the General Assembly or political subdivision, whether or not such agreement is executed in the name of the Commonwealth, or some political subdivision hereof. "Contracts" includes a subcontract only when the contract of which it is a part is with the officer's or employee's own governmental agency.

"Dependent" means a son, daughter, father, mother, brother, sister or other person, whether or not related by blood or marriage, if such person receives from the officer or employee, or provides to the officer or employee, more than one-half of his financial support.

"Employee" means all persons employed by a governmental or advisory agency, unless otherwise limited by the context of its use.

"Governmental agency" means each component part of the legislative, executive or judicial branches of state and local government, including each office, department, authority, post, commission, committee, and each institution or board created by law to exercise some regulatory or sovereign power or duty as distinguished from purely advisory powers or duties.

"Immediate family" means (i) a spouse and (ii) any other person residing in the same household as the officer or employee, who is a dependent of the officer or employee or of whom the officer or employee is a dependent.

"Officer" means any person appointed or elected to any governmental or advisory agency, whether or not he receives compensation or other emolument of office. Unless the context requires otherwise, "officer" includes members of the judiciary.

"Personal interest" means a financial benefit or liability accruing to an officer or employee or to a member of his immediate family. Such interest shall exist by reason of:
 

(i) ownership in a business if the ownership interest exceeds three percent of the total equity of the business; or

(ii) annual income that exceeds, or may reasonably be anticipated to exceed, $10,000 from ownership in real or personal property or a business; or

(iii) salary, other compensation, fringe benefits, or benefits from the use of property, or any combination thereof, paid or provided by a business that exceeds, or may reasonably be anticipated to exceed, $10,000 annually; or

(iv) ownership of real or personal property if the interest exceeds $10,000 in value and excluding ownership in a business, income, or salary, other compensation, fringe benefits or benefits from the use of property; or

(v) personal liability incurred or assumed on behalf of a business if the liability exceeds three percent of the asset value of the business. "Personal interest in a contract" means a personal interest which an officer or employee has in a contract with a governmental agency, whether due to his being a party to the contract or due to a personal interest in a business which is a party to the contract.

"Personal interest in a transaction" means a personal interest of an officer or employee in any matter considered by his agency. Such personal interest exists when an officer or employee or a member of his immediate family has a personal interest in property or a business, or represents any individual or business and such property, business or represented individual or business (i) is the subject of the transaction or (ii) may realize a reasonably foreseeable direct or indirect benefit or detriment as a result of the action of the agency considering the transaction. Notwithstanding the above, such personal interest shall not be deemed to exist where an elected member of a local governing body serves without remuneration as a member of the board of trustees of a not-for
profit entity and there is a full disclosure of any personal benefit arising from the relationship.

DECISION LOGIC TABLE FOR FEDERAL TAXES APPLICABLE NONRESIDENT ALIENS
 

If	and if	the visa categorically typically is	and the income code is	and the recipient must file forms	and recipient claims treaty benefits on forms	and payer withholds taxes at	and payer reports income and withholdings on the rate of forms
payment (or waiver) is for a qualifying scholarship or fellowship	it is for required tuition, fees, supplies and equipment	F or J	15	W-4, 1040NR	1001	n/a	1042, 1042s
payment (or waiver) is for a quialifying scholarship or fellowship	it is for incidental expenses (e.g., room, board, travel)	F or J	15	W-4, 1040NR	1001	14%	1042, 1042s
payment is to a contractor	it is for contracted services	H-1B	16	W-9, 1040NR	8233	30%	1042, 1042s
payment is to a contractor	it is an honorarium	H-1B	50	W-9, 1040NR	8233	30%	1042, 1042s
payment is to an employee	it is for teaching	F or J	18	W-4, 1040NR	8233	graduated rates	W-2, 1042(S)
payment is to an employee	it is during training	F or J	19	W-4, 1040NR	8233	graduated rates	W-2, 1042(S)
payment is to an employee	it is for artistic or athletic services	P	20	W-4, 1040NR	statement	graduated rates	W-2, 1042(S)
payment is to an employee	it is for any other services	H or O	17	W-4, 1040NR	statement	graduated rates	W-2, 1042(S)

This decision logic table is a simplified version of the more detailed schedule that appears in the following appendix.

FEDERAL TAXATION OF NONRESIDENT ALIENS

Summary of Areas of Greatest Relevance to GMU
 

Income Category  (note 1)	Income Code  (note 2)	Typical Visa Category (note 3)	Income Tax Withholding Rates (note 4)	FICA   (note 5)	To be Paid   (note 6)	To Claim Treaty Benefits (note 7)	For Annual Reporting (note 8)	Additional Notes (note 9)
Scholarships and Fellowships	15							9
(qualifying degree candidates)
Tuition and fees		F, J	n/a	no	W-4	1001	1042/1042s	10
Books, supplies and equipment		F, J	n/a	no	W-4	1001	1042/1042s	10
Room and board		F, J	14%	no	W-4	1001	1042/1042s	11
Incidental expenses		F, J	14%	no	W-4	1001	1042/1042s	11
Travel		F, J	14%	no	W-4	1001	1042/1042s	12
Teaching and research		see income code 18 below
Refunds of excess awards		F, J	14%	no	W-4	1001	1042/1042s
Independent personal services
Independent contractor	16	H-1B	30%	no	W-9	8233	1042/1042s	13
Honoraria	50	H-1B	30%	no	W-9	8233	1042/1042s	14
Dependent personal services (employer-employee relationship)
Compensation for teaching	18	F, J	graduated rates the same as U.S. citizens and resident aliens	no	W-4	8233	W-2/1042/S	15
Compensation suring training	19	F, J	graduated rates the same as U.S. citizens and resident aliens	no	W-4	8233	W-2/1042/S	16
Earnings as an artist or athlete	20	P	graduated rates the same as U.S. citizens and resident aliens	yes	W-4	statement	W-2/1042/S	17
Earnings of other employees	17	H,P	graduated rates the same as U.S. citizens and resident aliens	yes	W-4	statement	W-2/1042/S	18

Notes

1: Student visa holders may not claim the teaching provision of a treaty, and professors may not claim student and training provisions. Post-doctoral assistants may claim either depending on the type of visa they hold.

2: Income codes are a part of the federal reporting process. Code 15 may not be used for wages (e.g., stipends.)

3: The type of visa determines whether an individual can work in the U.S. Some visa categories only permit the work to be performed for the sponsoring agency. IRS determinations of residency status are not always identical to those of the INS. Persons holding category B visas may be reimbursed for (travel) expenses only.

4: Only U.S. source income is reportable and/or taxable with respect to nonresident aliens. Withholding on scholarships/fellowships and wages is applied after taking personal allowances and/or other exclusions into consideration. Graduated rates are contained in IRS publication 15. Recipients must provide taxpayer identification numbers for "effectively connected" income. Tax ID: SSN for individual; employer identification number for firm.

5: FICA is Federal Insurance Contributions Act (Social Security). As a general rule, tax treaties do not affect FICA. Submit Form SS-5 to the local Social Security Administration office to obtain a social security number.

6: Special instructions apply to preparing Form W-4 for nonresident aliens. Some are country specific. File annually. See IRS publication 519, page 35. Grant recipients must attach a certificate regarding filing of U.S. income tax returns. See IRS publication 515, pages 12-13.

7: Individuals can generally claim treaty benefits more than once provided they re-establish residency in their home country first. Statements must be filed annually in any event.

8: Generally nontaxable gross income must be reported, especially if treaty exemption or a reduced withholding rate is claimed. Use Forms 1042/1042S for the portion that is exempt by virtue of a treaty; use Form W-2 for taxable wages. Taxes withheld are deposited using a separate Form 8109 (Federal Deposit Coupon). (See also IRS publication 515.)

Federal Taxation of Nonresident Aliens: Summary of Areas of Greatest Relevance to GMU

9: Primary purpose of grantor is to further the education or training of recipient. Nondegree candidates are subject to tax on the entire amount of their grant at rates of either 14% or 30%.

10: Amounts of expended/awarded for these purposes are nontaxable provided such use does not conflict with the terms of the grant.

11: Rate can rise to 30% for certain nondegree scholars. See publication 519, page 12.

12: May be an allowable deduction on Form W-4, or may be subject to reduced withholding. There is a one year limitation.

13: A taxpayer identification number is only required from contractors that claim treaty benefits.

14: Most treaties fully or partially exempt income from U.S. tax if certain conditions are met. The withholding agent must monitor treaty limits to withhold taxes once limits are reached.

15: Teachers and researchers must supplement Form 8233 with a statement in accordance with revenue procedure 87-9. See appendix B to publication 519. Most treaties provide at least partial exemption from U.S. tax and withholding. Exempt from FICA for the first two calendar years or fractions thereof.

16: Students must supplement Form 8233 with a statement in accordance with revenue procedure 87-8. See appendix A to publication 519. Most treaties provide for at least partial exemption from U.S. tax and withholding. Exempt from FICA for the first five calendar years or fractions thereof provided the services performed carry out the purpose for which the student was admitted to the U.S.

17: Submit a "free form" statement in accordance with IRS publication 519, page 38. Central withholding may apply.

See IRS publication 519, page 36.

18: Submit "free form" statement in accordance with IRS publication 519, page 38.

Glossary

Candidate for a degree: Candidate for a degree means a full-time or part-time student who: (1) pursues a degree at a college or university, or (2) attends an educational institution that is authorized or accredited to provide a program that is acceptable for full credit toward a bachelor's or higher degree, or to provide a program of training to prepare students for gainful employment in a recognized occupation.

Effectively connected: Generally, all income from sources in the U.S. other than fixed or determinable annual or periodic income (such as interest, dividends and rent) is considered effectively connected. "Effectively connected" includes scholarships and fellowships.

Fellowship: A fellowship is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.

Honorarium: An honorarium is a payment to a professional person for services for which fees are not legally or traditionally required.

Qualified scholarship or fellowship: A qualified scholarship or fellowship is any amount received as a scholarship or fellowship that is used under the terms of the grant for: (1) tuition and fees required to enroll in, or to attend, an educational institution, or (2) fees, books, supplies and equipment that are required for the courses at the educational institution.

Scholarship: A scholarship is generally an amount paid for the benefit of a student at an educational institution to aid in the pursuit of studies. The individual may be either an undergraduate or a graduate student.

Stipend: A stipend is a fixed or regular payment such as a wage or salary for services rendered.

Terms of the grant: A scholarship or fellowship can qualify as tax-free even if the terms do not provide that it only be used for tuition and course- related expenses. It will qualify if the recipient uses the grant proceeds for tuition and course-related expenses. However, if the terms of the grant require its use for other purposes, such as room and board, or specify that the grant cannot be used for tuition or course-related expenses, the amounts received under the grant cannot generally be excluded from income (except by virtue of a tax treaty or special provision of the Code).

LIST OF TAX TREATY COUNTRIES
 

Country	Effective Date
Australia	December 1, 1983
Austria	January 1, 1957
Barbados	January 1, 1984
Belgium	January 1, 1971
Protocol	January 1, 1988
Canada	January 1, 1985
China, People's Rep. of Commonwealth of Independent States	January 1, 1987
Cyprus	January 1, 1976
Denmark	January 1, 1986
Egypt	January 1, 1948
Finland	January 1, 1982
France	January 1, 1991
Protocol	January 1, 1967
Protocol	January 1, 1970
Protocol	January 1, 1979
Protocol	October 1, 1985
Germany	Various
Greece	January 1, 1990
Protocol	January 1, 1953
Hungary	January 1, 1953
Iceland	January 1, 1980
India	January 1, 1976
Indonesia	January 1, 1991
Ireland	January 1, 1990
Italy	January 1, 1951
Jamaica	January 1, 1985
Japan	January 1, 1982
Korea, Republic of	January 1, 1973
Luxembourg	January 1, 1980
Malta	January 1, 1964
Morocco	January 1, 1982
Netherlands	January 1, 1981
Supplemental	January 1, 1947
Supplemental	November 10, 1955
New Zealand	January 1, 1967
Norway	January 1, 1984
Protocol	January 1, 1971
Pakistan	January 1, 1982
Philippines	January 1, 1959
Poland	January 1, 1983
Romania	January 1, 1974
Spain	January 1, 1974
Sweden	January 1, 1991
Supplemental	January 1, 1940
Switzerland	Various
Trinidad and Tobago	January 1, 1951
Tunisia	January 1, 1970
United Kingdom	January 1, 1990

NON-IMMIGRANT CLASSES (VISA CATEGORIES)
A-1         Diplomats, officials, and employees of foreign government and immediate family
            members; full/part-time study permitted.
            Employment:  possible with permission of the Department of State; must receive
            employment authorization from INS.
A-2         Other foreign government officials and immediate family members; full/part-time
            study permitted.
            Employment:  possible with permission of the Department of State; must receive
            employment authorization from INS.
A-3         Attendant, servant or personal employee of alien classified as A-1 or A-2 , and
            immediate family; full/part-time study permitted.
            Employment:  NONE
B-1         Temporary visitor for business; generally should not engage in full/part-time
            study.
            Employment:  NONE
B-2         Temporary visitor for pleasure; generally should not engage in full/part-time
            study.
            Employment:  NONE
C-1         Alien in transit through the U.S.; full/part-time study not permitted.
            Employment:  NONE
C-2         An alien entitled to pass through the U.S. for United Nations related purpose;
            full/part-time student not permitted.
            Employment:  NONE
C-3         An accredited official of a foreign government in transit through the U.S.;
            full/part-time study not permitted.
            Employment:  NONE
D           Crewman on a vessel or aircraft; full/part-time study not permitted.
            Employment:  NONE
E-1         Treaty trader, investor; full/part-time study permitted.
            Employment:  Employment is allowed only for the treaty-qualifying company
            through which the alien attained the status.
E-2         Dependent on treaty trader, investor; full/part-time study permitted.
            Employment:  Employment authorization does not extend to the dependents of
            the principal treaty trader or investor except for an alien spouse or unmarried
            dependent son or daughter of an alien employee of the Coordination Council for
            North American Affairs.
F-1         Student; must be engaged in full-time study during fall and spring semesters.
            Employment:  GMU students may be employed on-campus no more than 20
            hours per week during school year, full-time during breaks and summer.  Must
            be in good academic standing.
Occasionally students who are authorized for off-campus employment or practical training through schools other than GMU will be permitted to engage in employment at GMU. International Student Services must complete I-9 in these cases.
F-2         Dependent of F-1 student; may enroll in full/part-time study.
            Employment:  NONE
G-1         Designated principal resident representative of a foreign government which is a
            member of an international organization.  May engage in full/part-time study.
            Employment:  Only by the foreign government entity or the international
            organization.
G-2         Other accredited representatives of a foreign government to international
            organizations and members of their immediate families.  May engage in full/part-
            time study.
            Employment:  Same as G-1.
G-3         Representative of non-recognized or non-member foreign government to an
            international organization, and members of immediate family.  May engage in
            full/part-time study.
            Employment:  Principal representative may only be employed by the foreign
            government entity or the international organization.  Dependents in G-3 or G-4
            status may apply for permission to work under procedures set on Form I-566.
G-4         International organization officer or employee and members of immediate family.
            May engage in full/part-time study.
            Employment:  Principal representative may only be employed by the foreign
            government entity or the international organization.  Dependents in G-3 or G-4
            status may apply for permission to work under procedures set for on Form I-566.
G-5         Attendant, servant, or personal employee of G-1, G-2, G-3, and G-4 classes and
            members of immediate family.  May engage in full/part-time study.
            Employment:  Same as G-1.
H-1A        Professional nurses at an approved health care facility.  May engage in full/part-
            time study.
            Employment:  Employer specific; can only be employed by sponsoring employer.
H-1B        Temporary worker in "specialty occupation."  May engage in full/part-time study.
            Employment:  Employer specific; can only be employed by sponsoring employer.
            Maximum period of employment cannot exceed 6 years.
H-3         Trainees (other than graduate medical education).  Program of study determined
            by sponsoring entity.
            Employment:  May not engage in productive employment.
H-4         Accompanying family members of H-1A, H-1B and H-3 aliens.  May engage in
            full/part-time study.
            Employment:  NONE
I           Representative of foreign media, spouse and children.  May engage in full/part-
            time study.
            Employment:  May only be employed by sponsoring foreign news agency or
            bureau.  No employment for dependents.
J-1         Exchange visitor (student, visitor, scholar).  J-1 students must be engaged in full-
            time study.
            Employment:  Only with permission of sponsoring government or agency.
J-2         Dependents of J-1 exchange visitors.  May engage in full/part-time study.
            Employment:  May engage in employment with INS authorization.
K           Fiancee/fiance of U.S. citizen.  May engage in full/part-time study.
            Employment:  May be authorized for employment by INS.
L-1         Intracompany transferee.  May engage in full/part-time study.
            Employment:  Only by the petitioner through whom the status was obtained.
L-2         Dependent of L-1.  May engage in full/part-time study.
            Employment:  NONE
M-1         Vocational students at vocational/non-academic institutions.  Must be full-time
            student at school authorized to attend.
            Employment:  Only with INS approval after completion of studies.
M-2         Dependent of M-1.  May engage in full/part-time study.
            Employment:  NONE
N           Parents and children of certain G visa holders.  May engage in full/part-time
            study.
            Employment:  May be authorized for employment by INS.
O-1         Persons of extraordinary ability in sciences, arts, education, business or athletics
            demonstrated by sustained national or international acclaim.  Full/part-time study
            contingent on period of authorized stay.
            Employment:  May only be employed by the petitioning employer.
O-3         Dependents of O-1 aliens.  Full/part-time study contingent on period of
            authorized stay.
            Employment:  NONE
P-1         Alien athletes who compete individually or as part of a team at an internationally
            recognized level and alien entertainers who perform as part of a group that has
            received international recognition as "outstanding" for a "sustained and
            substantial period of time."  Entry to the U.S. is for a specific athletic competition
            or performance, and therefore, full/part-time study would be unlikely.
            Employment:  Only permitted for the specific event for which the entered.
P-2         Artists and entertainers (excluding groups) admitted through a reciprocal
            exchange program between a foreign-based and U.S.-based organization.
            Admission to the U.S. limited to the period required to engage in the
            performances for which admissions is sought, making full/part-time study
            unlikely.
            Employment:  Only permitted for the specific event for which they entered.
P-3         Artists, entertainers, and support personnel (including groups) who will perform
            under a program that is culturally unique.  Duration of stay limited to the time
            necessary for the performance for which admission is sought, making full/part-
            time study unlikely.
            Employment:  Only permitted for the specific event for which they entered.
Q           Participants in international cultural exchange programs designated by the
            Attorney General.  Alien is authorized to participate only in a program of
            international cultural exchange with a particular employer or trainer approved by
            INS, making full/part-time study unlikely.
            Employment:  Only for specific employers approved by INS.  Employment is
            sponsor/employer specific.
R-1         Temporary religious worker.  Full/part-time study permitted.
            Employment:  Only permitted to provide services to bona fide nonprofit religious
            organization in the U.S.
R-2         Dependent of temporary religious worker.  Full/part-time study permitted.
            Employment:  NONE
TC          Canadian citizen who seeks temporary admission to engage in business at a
            professional level under the U.S.-Canada Free Trade Agreement.  Full/part-time
            study permitted.
            Employment:  The employment must be in one of the professions specified in the
            regulations.  Most professions are listed.  Dependents will be admitted in B-2
            status and may not accept employment.  They are permitted to attend school full
            or part-time.
TPS         "Temporary Protected Status" which allows aliens of qualified countries to remain
            in the U.S. when "extraordinary and temporary conditions" exist in the home
            country.  May engage in full/part-time study.
            Employment:  May be authorized by INS.

FEDERAL TAX REFERENCE MATERIALS
(Note: Individual copies of IRS publications and forms may be requested by calling 1-800-829-3676. Multiple copies must be requested in writing. Form 4190B may be used.)
            Number                                         Title
IRS Publications
        4                                            Student's Guide to Federal Income Tax
       15                                            Employer's Tax Guide (Circular E)
      508                                            Educational Expenses
      513                                            Tax Information for Visitors to the United States
      515*                                           Withholding of Tax on Nonresident Aliens and Foreign Corporations
      519*                                           U.S. Tax Guide for Aliens
      520*                                           Scholarships and Fellowships
      552                                            Recordkeeping for Individuals
      597                                            Information on the United States-Canada Income Tax Treaty
      686                                            Certification for Reduced Tax Rates in Tax Treaty Countries
      901*                                           U.S. Tax Treaties
      937                                            Business Reporting
Forms
      SS-5*                                          Application for Social Security Card, Replacement or Correction
      SS-8                                           Determination of Employee Work Status for Purposes of Federal
                                                     Employment Taxes and Income Tax Withholding
      W-2                                            Wage and Tax Statement
      W-4                                            Employee's Withholding Allowances Certificate
      W-8                                            Certificate of Foreign Status
      W-9                                            Request for Taxpayer Identification Number and Certification
      941                                            Employer's Quarterly Federal Tax Return
      1000                                           Ownership Certificate
      1001*                                          Ownership, Exemption, or Reduced Rate Certificate
      1042                                           Annual Withholding Tax Return for U.S. Source Income of Foreign
                                                     Persons
      1042S                                          Foreign Person's U.S. Source Income Subject to Withholding
      1078                                           Certificate of Alien Claiming Residence in the United States
      1099-MISC                                      Statement for Recipients of Miscellaneous Income
      4224                                           Exemption from Withholding of Tax on Income Effectively Connected
                                                     with the Conduct of a Trade or Business in the United States
      8109-B                                         Federal Tax Deposit Coupon
      8233*                                          Exemption from Withholding on Compensation for Independent
                                                     Personal Services of a Nonresident Alien Individual
* Key publications and forms