In each of the following independent situations decide

whether the
In each of the following independent situations, decide whether the business organization
should treat the person being paid as an employee and should withhold social security,
Medicare, and employee income taxes from the payment made.1. Tiny Jacobs owns and
operates a cigar shop as a sole proprietor. Jacobs withdraws $2,000 a week from the cigar
shop.2. Sam Brandon is a court reporter. He has an office at the Metro Court Reporting Center
but pays no rent. The manager of the center receives requests from attorneys for court reporters
to take depositions at legal hearings. The manager then chooses a court reporter who best
meets the needs of the client and contacts the court reporter chosen. The court reporter has the
right to refuse to take on the job, and the court reporter controls his or her working hours and
days.Clients make payments to the center, which deducts a 25 percent fee for providing
facilities and rendering services to support the court reporter. The balance is paid to the court
reporter.During the current month, the center collected fees of $40,000 for Brandon, deducted
$10,000 for the center's fee, and remitted the remainder to Brandon.3. Ken, a registered nurse,
has retired from full-time work. However, because of his experience and special skills, on each
Monday, Wednesday, and Thursday afternoon he assists Dr. Grace Sue, a dermatologist. Ken
is paid an hourly fee by Dr. Sue. During the current week, his hourly fees totaled $700.4. After
working several years as an editor for a trade magazine, Lisa quit her job to stay at home with
her two small children. Later, the magazine asked her to work in her home performing editorial
work as needed. Lisa is paid an hourly fee for the work she performs. In some cases, she goes
to the company's offices to pick up or return a manuscript. In other cases the firm sends a
manuscript to her, or she returns one by e-mail. During the current month, Lisa's hourly
earnings totaled $1,500.5. Investor Corporation carries on very little business activity. It merely
holds land and certain assets. The board of directors has concluded that it needs no
employees. It has decided instead to pay David John, one of the shareholders, a consulting fee
of $12,000 per year to serve as president, secretary, and treasurer and to manage all the affairs
of the company. John spends an average of one hour per week on the corporation's business
affairs. However, his fee is fixed regardless of how few or how many hours he works.Analyze:
What characteristics do the persons you identified as "employees" have in common?View
Solution: In each of the following independent situations decide whether the
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