Simon Stevens is a high school history teacher.Simon is a national expert in ancient Mayan ruins.In July of 20X1,he was hired by the local university to teach an elective course in ancient Mayan history.Simon then conducted a field trip of the ruins in Guatemala with some of the local students from July 27^th to August 7^th.He recruited another local expert to teach his last class that fell during the dates of the trip.
Simon earned $55,000 from his teaching job.He negotiated a contract price of $5,000 to teach the university elective and $7,000 to conduct the tour.The university provided Simon with office space during the month of July.He used his laptop computer to prepare his lectures and the tour material.Additionally,Simon used his extensive collection of books to prepare his notes.He was not provided any benefits or insurance by the university.Simon was paid on July 31^st and August 31^st.
Simon is not sure how to prepare his tax return.He has a number of expenses from his university job,and wants to know if he can use them to reduce his taxes payable.
Required:
Determine the tax treatment of Simon's income for 20X1.Apply the four tests within the guidelines used by the courts to determine whether a taxpayer is an employee or an independent contractor.

Question

Quizplus · Accepted Answer

The Answer is Based on the facts of Laura J.Foley (Appellant)v.Her Majesty the Queen (Respondent),2006 DTC 2281)
Control test:
Arguments for Employee: The university sets the courses to be offered; university enrols students
Arguments for Independent Contractor: Simon prepares his lectures,unsupervised.He conducts the tours of the ruins without any assistance.He is allowed to hire a fellow expert to teach one of his classes.
Ownership of Tools:
Arguments for Employee: Classroom and office space provided by the university.
Arguments for Independent Contractor: Collection of books; laptop computer; background experience; knowledge; and ability to lecture.
Chance of Profit and Risk of Loss:
Argument for Employee: Salary paid by university
Arguments for Independent Contractor: Contract price was negotiated; ability to turn down contracts; lack of benefits and insurance
Integration:
Argument for Employee: Course offered by the university
Arguments for Independent Contractor: Course is an elective and not integral to the university's curriculum; tour is an option for students
Based on the facts of Foley vs.the Queen,Simon may very well be able to claim his university earnings as self-employed earnings and deduct some of the expenses.His teaching salary would fall under 'employee earnings'.

Simon Stevens Is a High School History Teacher