PAYROLL FUNDAMENTALS
COMPREHENSIVE STUDY GUIDE 2026
COMPLETE QUESTIONS ANSWERS
VERIFIED
● Worker that requires the employer to pay ER taxes. Answer: Employee
● Worker that receives W2 form. Answer: Employee
● Worker that does not have taxes withheld. Answer: Independent
Contractor
● Worker that has TIN. Answer: Independent Contractor
● Worker that receives 1099 Form. Answer: Independent Contractor
● Asks how independent is the employee and how much control can be
exervised over the worker.. Answer: Common Law Test
● A worker cannot sign a new contract stating that they will be an
indepndent contractor.. Answer: Common Law Test
, ● Employer has treated similar workers as independent contractors for
any period and has filed tax returns. Answer: Reasonable Basis Test
● Longstanding industry standard of treating similar workers as
independent contractors. Answer: Reasonable Basis Test
● Court decisions for treating workers in similar circumstances as
independent contractors. Answer: Reasonable Basis Test
● IRS has ruled in a "published ruling" that the workers are indpendent
contractors. Answer: Reasonable Basis Test
● Temporary Service Provider or Leasing Company. Answer: Pays
employees and taxes instead of company the employee is performing
services for
● Immigration reform and Control Act of 1986 (IRCA). Answer:
Requires employer to verify employees' eligibility for employment in
the US.
● Penalties for Violating IRCA. Answer: $375 for the first offence and
$16,000 for the third
COMPREHENSIVE STUDY GUIDE 2026
COMPLETE QUESTIONS ANSWERS
VERIFIED
● Worker that requires the employer to pay ER taxes. Answer: Employee
● Worker that receives W2 form. Answer: Employee
● Worker that does not have taxes withheld. Answer: Independent
Contractor
● Worker that has TIN. Answer: Independent Contractor
● Worker that receives 1099 Form. Answer: Independent Contractor
● Asks how independent is the employee and how much control can be
exervised over the worker.. Answer: Common Law Test
● A worker cannot sign a new contract stating that they will be an
indepndent contractor.. Answer: Common Law Test
, ● Employer has treated similar workers as independent contractors for
any period and has filed tax returns. Answer: Reasonable Basis Test
● Longstanding industry standard of treating similar workers as
independent contractors. Answer: Reasonable Basis Test
● Court decisions for treating workers in similar circumstances as
independent contractors. Answer: Reasonable Basis Test
● IRS has ruled in a "published ruling" that the workers are indpendent
contractors. Answer: Reasonable Basis Test
● Temporary Service Provider or Leasing Company. Answer: Pays
employees and taxes instead of company the employee is performing
services for
● Immigration reform and Control Act of 1986 (IRCA). Answer:
Requires employer to verify employees' eligibility for employment in
the US.
● Penalties for Violating IRCA. Answer: $375 for the first offence and
$16,000 for the third
