In memorandum form: Using the IRS test, determine whether or not the workers are employees or independent contractors. Your answer will require you to list the elements of the test, analyze the facts in light of the elements, and draw a conclusion.

Daisy Shuttle operates shuttles that take passengers from the Will Rogers World Airport in Oklahoma City to various hotels in the city. Daisy Shuttle previously employed drivers and paid them on an hourly basis. In 2021, however, the company reorganized its business model. It now treats its drivers as independent contractors.

Daisy Shuttle recently hired new legal counsel, Roseanne McCabe, who expressed concern about the classification of its drivers. McCabe is unclear whether to classify drivers as employees or independent contractors. You will prepare a memorandum to Ms. McCabe in which you will answer her questions about classification.

Ms. McCabe is concerned about liability under the Internal Revenue Code. The law (26 U.S. Code 3402) requires employers to deduct and withhold taxes from payments made to employees. There is no such requirement for independent contractors. Daisy Shuttle is concerned about whether they should be withholding taxes from their driver's paychecks.

You must conduct your analysis using the Internal Revenue Service (IRS) worker classification test. Using that test, determine whether or not the workers are employees or independent contractors. Your answer will require you to list the elements of the test, analyze the facts in light of the elements, and draw a conclusion.