I completely agree with other respondents regarding the voluntary nature of
participating in a clinical trial. Employees that participate in a clinical
trial should be doing so "on their own time" as well. Since the
participation is voluntary, the argument of your tax department falls apart.
However, there is an IRS requirement that any person (non-employee) receive
a 1099 from an organization when they have received $600 or more in any
calendar year from that organization. We've instituted a process of tracking
clinical trials participation by social security number within our
accounting system so we can generate 1099s for people as appropriate each
January. And, we include in our informed consent a paragraph noting this
requirement and informing the study subject that the 1099 will be generated
and reported to the IRS...Bill

Bill Caskey, PhD
Director, Research & Grants Administration
Children's Mercy Hospital
2401 Gillham Road
Kansas City, MO  64108

Voice:(816) 234-3879
FAX:(816) 855-1982
E-mail:  xxxxxx@cmh.edu <mailto:xxxxxx@cmh.edu>

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-----Original Message-----
From: Peggy Sandoe [mailto:xxxxxx@WPAHS.ORG]
Sent: Wednesday, January 17, 2001 10:03 AM
To: xxxxxx@HRINET.ORG
Subject: Compensation for Employees/Nonemployees

This is my first posting to this listserve - I would very much appreciate
your advice in a situation that has arisen.

Our tax department is considering doing the following two things:

1) Treat the compensation for employees who participate in one of our
research projects as income for employee services rather than subject
compensation and report it on W-2s rather than 1099s.

2) Hire other subjects who are not employees as casual employees.

Their argument is that if the payor is exercising direction and control over
the individual's activites, the person needs to be classified as an
employee.

Has anyone ever encountered these issues before? Any comments you can
provide would be helpful.

Peg Sandoe
Research Manager, Center for Neurosciences Research
Allegheny-Singer Research Institute
Pittsburgh, PA 15212

(412) 359-8973
xxxxxx@wpahs.org

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