I'm working through the 2025 tax calculations—computing the employer and employee tax amounts, applying the employee credit, then calculating the penalty and interest on the unpaid balance.

For 2026, I'm doing the same process with the higher compensation figure, which yields a substantially larger total liability. Combining both years gives me the aggregate net tax, penalties, and interest across the period.

Now I'm shifting to analyze Element B of the contractor status test—the fact that the installation was marketed as part of a single price package representing 38% of gross revenue appears to be a substantial component, which likely causes Element B to fail under the conjunctive test. This failure alone would defeat contractor status and means the reserve isn't zero, contradicting the COO's position. While the business bears the burden of proving all three elements, Element B's failure is essentially dispositive for reclassification, though the facts around Elements A and C still matter for determining willfulness, negotiating a closing agreement, and potentially arguing the conditions under rule 3.

For Element A, I'm identifying the key control factors: who sets arrival windows, whether the worker can reject jobs without penalty, substitution rights, control over sequence and methods, onsite supervision, contract language around termination and exclusivity, dress codes, training, quality inspections, reporting, pricing negotiation, penalties, and scheduling systems. Element C requires showing an independently established trade—looking at business formation and tax returns, own tools, insurance, permission to work for competitors, actual frequency of competing work, advertising, licenses, customer base, employees, equipment investment, whether the business predated the Northbank relationship, survival after termination, profit/loss opportunity, and bidding practices. I also need to check the labeling and invoicing under rule 2.

The 1099 filing gives a 40% credit and is relevant though not controlling, and there's a presumption of employment under the economic reality test. The employer can't recoup that 7% from workers under rule 5, so it's a genuine cost. For preservation, I need to secure dispatch records, scheduling logs, texts, emails, GPS data, punch apps, training materials, safety sign-offs, invoices, subcontractor agreements, insurance certificates, and chargeback records—suspending auto-deletion and doing forensic imaging. I should interview supervisors and dispatchers with appropriate warnings, sample some installers, and get third-party verification of other clients, while avoiding any backdating under rule 8. My recommendation is to book $354,922.40 as