## Q34 key (Installers on Form 1099)

1. Element B strongly favors employee status because installation is sold as part of Northbank's offering and produces 38 percent of revenue. The agreements do not overcome that statutory fact. Missed: the company treats labels as dispositive.
2. Elements A and C cannot be finalized without scheduling, rejection, substitution, supervision, methods, outside-work, and price-negotiation facts. The small businesses, tools, insurance, and contractual permission help Northbank but do not answer actual practice. Missed: counsel concedes or denies status before gathering the controlling evidence.
3. For 2025: employer tax is 8 percent of $980,000 = $78,400. Gross employee tax is 7 percent = $68,600; the 40 percent credit is $27,440; net employee tax is $41,160. Net tax is $119,560; 10 percent penalty is $11,956; 4 percent interest is $4,782.40. Total 2025 reserve is $136,298.40. Missed: the reserve is materially wrong.
4. For 2026: employer tax is 8 percent of $1,600,000 = $128,000. Gross employee tax is $112,000; credit is $44,800; net employee tax is $67,200. Net tax is $195,200; penalty is $19,520; 2 percent interest is $3,904. Total 2026 reserve is $218,624. Missed: same.
5. Combined nonwillful reserve is $136,298.40 + $218,624 = $354,922.40. Missed: management carries zero or an unsupported rounded exposure.
6. Preserve dispatch, pricing, supervisor, substitution, customer, invoice, and outside-work records; interview a representative cross-section before agency admissions. Missed: the actual-practice evidence is lost or filtered through executives.
7. A prospective compliant redesign may proceed without admitting the past, but no backdating. Reserve the computed maximum, gather facts, then decide whether to contest elements A and C or pursue a closing agreement. Missed: the company either freezes a flawed model or concedes before it knows its best defense.