The University of North Maine located in Smallville, North Maine, has a large online division. This online division has 750 adjunct faculty members who are all paid on an independent contract basis. (No Social Security or Federal Unemployment taxes or benefits are paid to adjunct faculty.) The contracts between faculty members and the university specify that the payment will be contract labor and that the faculty member is responsible for their own taxes. In recent years, however, the university has changed Deans and other management of the online division. The new administration is pushing hard to standardize the processes and teaching methods used by faculty and have started using Blackboard, a new course management system. Faculty are now required to use pre-designed courses developed on Blackboard and are instructed that they are not allowed to change anything within the course. In addition, the administration, after hearing that some faculty were not active in their classrooms, began monitoring activity levels and started a new policy that required faculty to login to each classroom at a minimum of five days each week. If faculty members refuse to honor the new rules and procedures, they are told that new sections of the courses will not be awarded. Faculty members are also required to login and post comments into a faculty portal where the new administration provides new rules and procedures which must be followed.

Task: 

Your task is to advise the university on its potential to be classified as an employer of faculty rather than their current practice of independent contract status with faculty. Critically examine the tax code, regulations, and case law to prepare your tax memo, which will later be used by your partner to develop a letter to the university. Must provide history, current tax law, and your recommendations. Cite all references using APA format. Prepare your memo and then discuss the possibilities.