Using independent contractors to deliver published material is the norm.  As a publisher, you know the benefits:  lower costs and limited liability.  If not properly executed, however, it is a system fraught with IRS fines and other headaches.

The issue is control.  In this relationship, the publisher has the right to direct the end result, but should stay away from directing the contractor in the method of completing the delivery.  The more control the publisher exercises over the contractor's operation, the more likely it is that the relationship is actually one of publisher/employee.  Think of yourself as a customer of the contractor, and treat them the same as your other vendors.  They are independent business people whether or not they want to be; some of them may inadvertently lull you, and themselves, into that comfortable publisher/employee relationship.

So, where do the fines come in?  If a situation arises where the Internal Revenue Service (IRS) is taking a look at your tax situation, I suppose it is possible questions may come up, but the fear that keeps me very careful about how I treat my contractors is the disgruntled or desperate contractor with tax problems.  He may take his evidence to the IRS and offer up you as way to escape his tax problems.  You see, if he is an employee, he is not responsible for half of his FICA; that's the employer's responsibility.  Multiply that by all of your contractors and add applicable penalties, and you'd probably wish you had made them employees from the beginning.  This doesn't even take into account your other obligations as an employer such as Worker's Compensation and unemployment insurance.

I continue to use contractors.  I'm am just careful to concern myself with the end results and not the methodology.  The IRS, on its website, has helpful links and publications regarding this matter.

Ray Boddie, Jr.