Comprehensive and Detailed Explanation:

The Common Law Test is used by the IRS to determine whether a worker is classified as an employee

or an independent contractor. The test evaluates factors related to:

Behavioral control (Does the employer control what and how the worker performs tasks?)

Financial control (Are business expenses reimbursed? Is the worker making an independent profit or

loss?)

Type of relationship (Are there benefits like paid time off? Is the relationship expected to be long-

term?)

Option A (Time Test) is incorrect because it applies to qualifying earned income for tax benefits, not

employment classification.

Option B (Substantial Presence Test) is incorrect because it determines resident alien tax status.

Option C (Permanent Resident Test) is incorrect because it relates to immigration status, not

employment relationships.

Reference:

IRS Publication 15-A – Employer’s Guide to Worker Classification

Payroll.org – Independent Contractor vs. Employee Compliance