Employer Identification Number (EIN): All business entities must have an employer identification number.Employee: An individual providing services in exchange for wages or salary where the employer has the right to control and direct the individual with regard to the result to be accomplished (what will be done) and the process by which the result is accomplished (how it will be done). The individual has a skill or expertise not available within the University and the need for their services usually does not extend beyond a limited period of time in which to complete a specifically defined project. Consultants: Independent contractors who specifically provide expert professional advice.Further definition and examples of conflicts of interest are provided in the Purchasing Policies Manual, section 1.4, the University Handbook for Appointed Personnel, section 2.06.08, and the Classified Staff Personnel Policy Manual, section 413.0. Any employee of the University, or relative of an employee, who has a substantial interest in any contract, sale, purchase, or service, including consulting, involving the University shall (a) make this fact known to the University Chief Procurement Officer and (b) refrain from participating in any manner in such contract, sale or purchase. Conflict of Interest: A conflict of interest exists when a personal influence might bear upon or appear to bear upon a decision made by a University employee in his or her capacity as a public employee.Business Entity: The structure in which a business is established, such as corporations, partnerships, limited liability companies, governmental agencies, and trusts.This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international. State of Arizona Guidance, including but not limited to, State of Arizona Accounting Manual, Topic 90 Section 50 Employee vs. IRS Guidelines, including but not limited to: A business entity should supply the IRS Form W-9 or a substitute W-9 to Accounts Payable prior to establishing a Requisition (REQS) or Disbursement Voucher (DV). This form is not required when contracting with a business entity that has a valid Employer Identification Number (EIN). Court cases were used as a conceptual framework for the IRS to develop a list of the most common and significant independent contractor characteristics. Financial Services has summarized and simplified the IRS list of characteristics on the Independent Contractor Form (ICON form). The facts and circumstances that make one individual an independent contractor may differ from those that make another individual an independent contractor. Therefore, if a University department engages an individual as an independent contractor, the department must supply the necessary evidence to support this position.ĭetermining independent contractor status is driven by facts and circumstances. The Internal Revenue Service (IRS) presumes that all individuals who provide a service are employees unless there is evidence to support the classification of the individual as an independent contractor. Scholarship recipients are not expected to provide a service whereas employees and independent contractors are expected to provide a service. The Internal Revenue Code refers to three basic payment types: (1) scholarship/fellowship, (2) independent contractor, and (3) employee. Refer to policy 9.10 Requisitions/Reimbursements. Note: This policy does not apply to reimbursements to employees or individuals for recruiting expenses. To provide guidelines for distinguishing between employee and independent contractor status and to safeguard the University and its employees from potential liability related to incorrect classification.
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