Taxation Tasks Essay
1) Patty owned Patty’s Cakes in Jacksonville, Florida. She sold her business to Fruity’s, Inc. a national pastry company. There was a non-compete agreement in the contract for the sale of her business. In the non-compete, Patty agreed not to work in any capacity in the food industry for 10 years on the entire east coast. A court would likely determine that the non-compete agreement
a) violates federal law
b) is unenforceable
c) is enforceable
d) both A and B
2) A liability that may extend from an employee to the employer if the employee is acting within the scope of his or her employment at the time the liability arose is called:
a) vicarious liability
b) employee liability
c) employer liability
d) adverse liability
3) A person who contracts with a principal to perform a task according to her or his own methods, and who is not under the principal’s control regarding the physical details of the work is called a/an:
a) Contingent worker
b) Temporary worker
c) Independent contractor
d) All of the above
4) Benita works as a nursing assistant in a retirement home run by Cottonwood Care Centers, a national operator of facilities providing care for the elderly. Benita works 53 hours a week. After looking at her payroll stubs for the past 6 months, she concludes that she has not received sufficient overtime pay. She complains to her supervisor but the company takes no action.
a) Benita can bring a complaint to the National Labor Relations Board under the Fair Labor Standards Act of 1938 (FLSA)
b) Benita can bring a complaint to the U.S. Department of Labor, under the Fair Labor Standards Act of 1938 (FLSA)
c) Benita can bring a complaint to the U.S. Department of Labor, under the Employee Retirement Income Security Act of 1974 (ERISA).
d) Benita can bring a complaint to the U.S. Department of Labor, under Executive Order 11246
5) Ling frequently stocks shelves for Ace’s Market on an as needed basis. Ace pays Ling $5 per shelf. One day Ling falls off a broken ladder while stocking a shelf. Line is seriously injured:
a) If Ling is determined to be an independent contractor, he is eligible for workers’ compensation
b) If Ling is determined to be an employee, he is eligible for workers’ compensation
c) Ling is eligible for workers’ compensation whether he is an employee or an independent contractor
d) None of the above
6) ABC, Inc. solicited bids from various independent contractors to landscape the grounds of its new office complex. Drew, head of facilities management told Patty, his secretary, that he would not accept any bids from Hispanic contractors. Drew explained that he would authorize hiring only American contractors to work on the grounds. A Hispanic contractor brings a lawsuit against ABC for discriminations.
a) Drew’s refusal to hire Hispanic companies is a violation of the Independent Contractors Act of 2006.
b) Drew’s refusal to hire Hispanic companies is a violation of the Title VII of the Civil Rights Act
c) The Hispanic contractor cannot prevail in a discrimination case because John’s conversation with his secretary is confidential and cannot be used as evidence.
d) Drew’s refusal to hire Hispanic companies is not a violation of the Title VII of the Civil Rights Act because that law does not cover discrimination against independent contractors.
7) BRC Partners is a consulting firm. Sam and Arnie are analysts for BRC. Sam was hired as an employee and Arnie was hired as an independent contractor. They both work in the same BRC office under the same supervisor. They both must work Monday through Friday during the standard business hours. Both are required to report to weekly staff meetings. Sam is paid a salary and the proper federal and state tax withholdings are made. Arnie does not receive benefits like retirement and health insurance and his is paid by the project with no federal and state withholdings. Arnie signed a contract that clearly stated he was an independent contractor and not an employee.
a) BRC has properly classified Arnie as an independent contractor
b) BRC has improperly classified Arnie as an independent contractor
c) BRC has improperly classified Arnie as an independent contractor, however, its contract with Arnie is binding and BRC will have no liability under federal or state law for the misclassification.
d) BRC has improperly classified Arnie as a independent contractor, however, its contract with Arnie is binding and BRC will have no liability under federal and state law for the misclassification, but Arnie will have liability under federal and state law.
8) Pilar is hired by Axel, Inc. as an independent contractor. To avoid a determination by the IRS that Pilar has been misclassified as an independent contractor, Axel should:
a) provide training to Pilar
b) pay her by the hour
c) pay FICA
d) none of the above
9) Clarence works as an independent contractor for the law firm of Kafka, Rivera and Grisham.
a) Clarence will be responsible for making payments for his Social Security (FICA), estimated federal income tax payments, estimated state income tax payments and Medicare.
b) Clarence will be responsible for making payments for his FICA and Medicare and the law firm will be responsible for withholding payroll deductions for his federal and state income taxes.
c) Clarence will be responsible for making payments for his Social Security (FICA) and Medicare, but the law firm will be responsible for making estimated federal income tax payments, estimated state income tax payments for him.
d) Clarence will be responsible for making payments for his Social Security (FICA), withholding deductions for his federal and state income taxes and Medicare.
10) Which of the following is not covered by the EEOC’s definition of contingent worker?
a) an employee hired through a staffing firm
b) a temporary, seasonal, or part-time worker
c) an applicant
d) an independent contractor