Court cases going back to the 1939 Internal Revenue Code have
repeatedly held that part-time or adjunct faculty members are
common law employees of the schools for which they teach.
Oftentimes, these cases come before the courts because the faculty
member classifies himself or herself as an independent contractor
to claim the expenses incurred in teaching the class on Schedule C
of Form 1040, as opposed to Schedule A for employees. Schedule C
allows independent contractors to claim the full amount of business
expenses as a deduction, whereas Schedule A allows employees to
claim only those expenses that exceed 2% of their adjusted gross
income. In many of these cases, the teacher claims he or she is an
independent contractor, even though the school classifies the
teacher as an employee.
In Schramm v. Commissioner, No.
8938-09 (T.C. Aug. 30, 2011), a professor who taught an
Internet-based course for a university attempted to claim
deductions on Schedule C as an independent contractor, even though
the university classified him as an employee and reported his wages
on Form W-2. The Tax Court, consistent with many past decisions,
rejected his position. In reaching its conclusion, the court
examined the following factors:
the degree of control exercised by the principal;
which party invested in the work facilities used by the
the opportunity of the individual for profit or loss;
whether the principal can discharge the individual;
whether the work is part of the principal's regular
the permanency of the relationship;
the relationship the parties believed they were creating;
the provision of employee benefits.
The Schramm court examined each of the above factors
and concluded that although some of them, such as the lack of
employee benefits paid to the teacher, suggested he was an
independent contractor, the balance of the evidence suggested the
contrary. The Tax Court's decision was interesting because the
teacher in question taught the course over the Internet from a
location of his choosing, but the Tax Court felt that was a minor
point in considering the amount of control the university exercised
over his employment.
Although there are at least two cases in which the courts have
concluded that a part-time teacher or adjunct professor was an
independent contractor, they appear to be based on distinguishable
facts or at variance with the weight of authority. In one case, for
example, the teacher in question was a full-time professor for a
university, but he also occasionally taught seminars for a business
institute established and operated by the university. The court
held that although the professor was an employee of the university,
generally, he performed services for the business institute as an
In light of the foregoing, it appears well-settled that adjunct
professors are generally considered to be employees both for
employment tax purposes and for purposes of claiming a deduction
for expenses incurred in performing their duties as a professor.
Institutions with adjunct faculty should consider reminding their
part-time and adjunct faculty members that expenses they incur in
connection with teaching are subject to the 2% floor for employee
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Effective January 1, 2015, certain employers became subject to the employer mandate of the Patient Protection and Affordable Care Act, and thus subject to liability under the ACA Employer Shared Responsibility provisions.