Considerations in the Classification of Workers

Schramm Decision Addresses Adjunct Professors

Mark A. Segal, JD, MLT, CPA

The recent decision in William E. Schramm, et al. v. Comm'r (TC Memo 2011-212) concerned the employment status of an adjunct professor at Nova Southeastern University (NSU). In his capacity of adjunct professor, Schramm taught online courses. At issue in the case was Schramm's attempt to be classified as self-employed (i.e., filing Schedule C). A positive aspect of such status for a worker is the ability to treat work-related business expenses as deductions for adjusted gross income (AGI). A further tax benefit associated with such treatment is that the deduction of expenses on Schedule C can potentially reduce certain other types of taxes. In contrast, were Schramm to be treated as an employee, such expenses would likely be classified as “tier 2” itemized deductions (i.e., subject to the 2% of AGI floor, discussed below).