ance with that presumption they must be treated as its employees, for purposes of the above-mentioned taxes.

S.S.T. 310 and Mim. 6381 are superseded, since the positions set forth therein are restated under current law in this Revenue Ruling.

Driving instructors performing services on a commission basis for a school that furnishes the training automobile, trains them to employ its driving methods, and requires them to give lessons under its name and conform to its standards are employees of the school.

26 CFR 31.3121(d)-1: Who are employees. (Also Sections 3306, 3401; 31.3306 (i)-1, 31.3401 (c)-1.)

Rev. Rul. 68-598

Advice has been requested whether certain individuals who perform services for a company under the circumstances described below are employees of the company for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages (chapter 21, 23, and 24, respectively, subtitle C, Internal Revenue Code of 1954).

The company operates a driving school that offers automobile driver training to the general public. It engages the individuals, under written agreements, to give driver training lessons in specified areas and pays them specified commissions for the services performed. Each driver instructor is trained by the company and, when giving driving lessons, is required to conform to basic standards established by it from time to time. The instructor agrees to give driving lessons only under the school's name, to charge a student no less than the minimum rate established by the company, and to turn over to the company a fixed percentage of fees collected by him.

The company furnishes the automobiles used for training students. The driver instructor pays the expenses of cleaning the vehicle used by him and for gasoline and oil. At the end of each day the instructor furnishes the company a record showing all the driver training given by him, the names of the students and the rates charged, and any amounts that are owed for lessons. The company may terminate an instructor's services if he fails to follow the standards established for training students, or for other reasons specified in the agreement. An instructor may terminate his services at any time, by giving appropriate notice to the company.

The driver instructors are employees for Federal employment tax purposes if they have the status of employees under the usual common law rules applicable in determining the employer-employee relationship. Guides for determining that status are found in three substantially similar sections of the Employment Tax Regulations, namely sections 31.3121 (d)-1 (c), 31.3306(i)-1, and 31.3401 (c)-1. These sections provide, in part, that generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the serv

ices, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to discharge is also an important factor indicating that the person possessing that right is an employer.

The facts in this case show that the driver instructors perform personal services that are an integral part of the business conducted by the company. They are trained by the company and are required to conform to its training standards and use its name and equipment. They may be discharged by the company. They are not engaged in independent business enterprises that require the outlay of capital or the assumption of business risks.

Accordingly, since the company exercises, or has the right to exercise, over the driver instructors in the performance of their services the degree of direction and control necessary to establish the relationship of employer and employee, they are employees of the company for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages.

A golf professional who sells lessons and equipment on the premises of a club and fixes prices, makes appointments, and carries on his activities without orders or instructions from club members or officials is not an employee of the club; S.S.T. 238 superseded.

26 CFR 31.3121 (d)-1: Who are employees. (Also Sections 1402, 3306, 3401; 1.1402 (c)-1, 31.3306 (i)−1, 31.3401 (c)-1.)

Rev. Rul. 68-625 1

The purpose of this Revenue Ruling is to update and restate, under the current statute and regulations, the position set forth in S.S.T. 238, C.B. 1937-2, 401.

1

The question presented is whether a golf professional performing services under the circumstances stated below is an employee of a golf club, for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages (chapters 21, 23, and 24, respectively, subtitle C, Internal Revenue Code of 1954).

The golf professional is given the privilege of selling lessons and golf equipment on the premises of the golf club. He is furnished certain facilities, such as space in the caddy house and locker room, and use of the club's telephone. His activities are confined strictly to golf instruction and the sale of golf equipment. He makes his own appointments for lessons, fixes his own prices and retains all remuneration received,

1 Prepared pursuant to Rev. Proc. 67-6, C.B. 1967–1, 576.

and buys and sells golf equipment in the same manner as would a retail merchant. The golf club has no right to direct and control him in the manner or method of performance of his services and no orders or instructions are given to him by any member or official of the club.

An individual is an employee for Federal employment tax purposes if he has the status of employee under the usual common law rules applicable in determining the employer-employee relationship. Guides for determining that status are found in three substantially similar sections of the Employment Tax Regulations: namely, sections 31.3121 (d)-1(c), 31.3306 (i)-1, and 31.3401 (c)-1.

The facts stated above show that the golf club does not exercise or have the right to exercise over the golf professional in the performance of his services the direction and control necessary to establish an employer-employee relationship under the usual common law rules. Accordingly, the golf professional is not an employee of the club for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, or the Collection of Income Tax at Source on Wages. Compare Revenue Ruling 68-626, below, which holds, on the basis of the facts stated therein, that a golf professional is an employee of a country club.

The golf professional in the instant case is engaged in carrying on a "trade or business" within the meaning of the Self-Employment Contributions Act of 1954 (chapter 2, subtitle A, of the Code) and the income he derives therefrom must be considered in computing net earnings from self-employment for purposes of that Act.

S.S.T. 238 is superseded, since the position set forth therein is restated under current law in this Revenue Ruling.

A salaried golf professional and his assistants who manage the golf shop of a country club under its supervision and are required to give lessons to the club's members at its established rates are employees of the club; S.S.T. 367 superseded.

26 CFR 31.3121 (d)-I: Who are employees. (Also Sections 3306, 3401; 31.3306 (i)-1, 31.3401 (c)-1.)

Rev. Rul. 68-6261

The purpose of this Revenue Ruling is to update and restate, under the current statute and regulations, the position set forth in S.S.T. 367, C.B. 1939-1 (Part 1) 293.

The question presented is whether a golf professional, and the persons whom he engages to assist him in performing services, are employees of a country club, for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages (chapters 21, 23, and 24, respectively, subtitle C, Internal Revenue Code of 1954). If they are

1 Prepared pursuant to Rev. Proc. 67-6, C.B. 1967–1, 576.

employees of the club, advice is requested as to the manner in which the golf professional's wages should be computed.

The golf professional performs services at the country club and receives a fixed salary each month. He also receives the proceeds from the operation of the golf shop, which consist of a certain amount every month for each bag of clubs cleaned and kept in the shop, and the profits from the sale of golf balls, bags, and supplies. In addition, he instructs club members at an hourly rate established by the club. The club has the right to direct and control the manner in which he manages the golf shop, his books are open to club inspection at all times, he must be available for, and is required to keep, lesson appointments, and he may engage such further help as the needs of the business require. Sections 31.3121(d)-1(c), 31.3306(i)-1, and 31.3401(c)-1 of the Employment Tax Regulations provide, in part, that generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of the necessary tools and supplies and the furnishing of a place to work, to the individuals who perform the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and method for accomplishing the result, he is an independent contractor. An individual performing services as an independent contractor is not, as to such services, an employee under the usual common law rules. In the instant case, the facts show that the golf professional and the individuals whom he engages to assist him are subject to the direction and control of the country club in the performance of the services described. Accordingly, the golf professional and his assistants are employees of the country club for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages. The golf professional's monthly salary, plus the proceeds derived from the golf shop and lessons given to members, minus the wages paid to his assistants and any expenses incurred in connection with the operation of the golf shop, are his "wages" for purposes of the above-mentioned taxes.

S.S.T. 367 is superseded, since the position set forth therein is restated under current law in this Revenue Ruling.

See Revenue Ruling 68-625, page 465, this Bulletin, which holds that a golf professional selling golf clubs and lessons on the premises of a golf club is not an employee of that club for Federal employment tax purposes.

"Country correspondents" who furnish weekly news items to a newspaper that has no control over the items submitted or hours devoted to work, and pays only for those items accepted and published, are not employees of the newspaper; Rev. Rul. 60-148 distinguished and S.S.T. 105 superseded.

26 CFR 31.3121 (d)-1: Who are employees. (Also Sections 3306, 3401; 31.3306 (i)-1, 31.3401 (c)-1.)

Rev. Rul. 68-6441

The purpose of this Revenue Ruling is to update and restate, under the current statute and regulations, the position set forth in S.S.T. 105, C.B. 1937-1, 373.

The question presented is whether "country correspondents" of a newspaper are employees of the newspaper for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and the Collection of Income Tax at Source on Wages (chapters 21, 23, and 24, respectively, subtitle C, Internal Revenue Code of 1954).

The newspaper has "country correspondents" throughout the area served by it who furnish weekly news items for the use of the newspaper. The publisher does not have any direction or control over the correspondents nor does he exercise any control over them as to the hours that must be devoted to their work. In most cases it is left entirely to the judgment of the correspondents as to what news items they submit. The publisher may either accept or reject the news items, and payment is made only for those items accepted and published. Although the publisher may request a correspondent to secure a particular story or news item, the correspondent is not required to do so, in which event the publisher has no remedy except to refuse further contributions. In some instances the publisher pays the correspondents no cash remuneration but sends them copies of the paper.

An individual is an employee for Federal employment tax purposes if he has the status of employee under the usual common law rules applicable in determining the employer-employee relationship. Guides for determining that status are found in three substantially similar sections of the Employment Tax Regulations: namely, sections 31.3121 (d)-1(c), 31.3306 (i)-1, and 31.3401 (c)-1.

The facts in the instant case show that the newspaper does not exercise or have the right to exercise over the country correspondents in the performance of their services the direction and control necessary to establish an employer-employee relationship under the usual common law rules. Accordingly, the "country correspondents" are not employees of the newspaper for purposes of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, or the Collection of Income Tax at Source on Wages.

S.S.T. 105 is superseded, since the position set forth therein is restated under current law in this Revenue Ruling.

Revenue Ruling 60-148, C.B. 1960-1, 391, which holds, under the facts therein, that two newspaper correspondents were employees of a newspaper for Federal employment tax purposes, is hereby distinguished.

1 Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.