South Carolina Tax Attorney

    The third factor used by the IRS in determining whether a worker is an employee or independent contractor is "opportunity."  This factor is not as clear on its face as the two previous factors.  Basically, what the opportunity factor means is the worker has an opportunity to realize a profit or loss from the work.

    If a worker is an employee, they get paid a salary or an hourly rate no matter how efficiently they complete the work.  An independent contractor has the opportunity to make a profit because he is paid for the job.  It is in his best interest to complete the work in a quality fashion and in the most efficient manner possible.  If the independent contractor keeps his expenses down then he can realize a greater profit. 

    Next time: the fourth factor is the employer’s right to discharge or fire a worker. 

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