Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 55-95

1955-1 C.B. 480

IRS Headnote

Individuals are selected by the M Community Service, Inc., to perform services as `homemakers' in private homes. The Service requires the individuals to keep daily records and retains the right to control the individuals in the performance of their services. Held , the individuals are employees of the Service for Federal employment tax purposes.

Full Text

Rev. Rul. 55-95

The question has been presented whether individuals who are selected and placed in private homes by the M Community Service, Inc., a casework agency, for the purpose of performing services as `homemakers' are the employees of such Service for purposes of the Federal Insurance Contributions Act (subchapter A, chapter 9, Internal Revenue Code of 1939.)

It is the purpose of the `homemaker' service to place individuals, carefully chosen for their homemaking skills and ability to get along with people, in a home where their presence is needed to maintain the home as a unit, and to keep it functioning during the temporary incapacity or unavoidable absence of the mother. The service is also available to adults overcome by short illnesses, infirmities of old age, or otherwise. The service is furnished free of charge when needed, through the relief funds of various charitable agencies. Some families, however, pay part or all of the cost of the service if they are able to do so.

In the beginning, the Service placed an advertisement in the newspaper for individuals who wished to register as homemakers. The individuals interested in the type of work involved now apply for registration. The individuals are health references. A determination of and give character and health references. A determination of whether a prospective homemaker has the necessary qualifications for an assignment is based on such character and health references and by trial on the job. The Service maintains a register of homemakers and requires them to keep a daily record of hours worked, which is then used by the Service in computing their remuneration. The Service pays the individuals by check from its own funds immediately upon completion of each assignment, without regard to whether it will be reimbursed by the family for whom the services were performed.

Section 1426(d)(2) of the Act provides, in part, that the term `employee' means any individual who under the common law rules applicable in determining the employer-employee relationship has the status of an employee. See section 408.204(c), Regulations 128, relating to common law employees.

It is concluded that the M Community Service, Inc., retains the right to exercise such direction and control over the homemakers in the performance of their services as is necessary to constitute an employer-employee relationship. Accordingly, it is held that individuals selected and placed in private homes by the M Community Service, Inc., to perform services as `homemakers' are employees of that Service for Federal employment tax purposes