Rev. Rul. 61-196

Reconsideration has been given to Mimeograph 6658, C.B. 1951-2, 168, which sets forth the position of the Internal Revenue Service with respect to the status of nurses 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).

Registered Nurses

(a) Independent contractor .-Registered nurses are skilled professionals who have been trained to render technical assistance in administering medications and treatment to the sick, wounded, or enfeebled. Although some of their duties may be domestic in nature, such duties are usually incidental to their regular professional duties. Registered nurses, by reason of their professional status, generally are independent contractors in the performance of private duty nursing services. They hold themselves out to the public as exercising an independent calling requiring specialized skills. Ordinarily, they have full discretion in administering their professional services and are not subject to sufficient direction or control to warrant the finding of an employment relationship, even though they may be subject to the supervision of the attending physician. Under such circumstances they are independent contractors and not employees for Federal employment tax purposes.

(b) Employment relationship .-Hospitals, clinics, nursing homes, public health agencies, etc., engage registered nurses on a full-time basis as a part of their regular staffs. Some physicians engage them as office attendants in connection with their private practice. The nurses work for a salary and follow prescribed routines during fixed hours. Although their duties are professional in nature, these nurses lose their individuality by integrating their services into the employer's business and by the employer's right to set the order of and supervise their services. These nurses are subject to the direction and control of the institution, agency, physician, etc., and are employees in every sense of the word.

Practical Nurses

In the past several years the status of practical nurses as a group has undergone a change from one of a practically domestic role to that of a qualifies semi-professional. Almost uniform statutes now in force in all fifty states require that before qualifying as a licensed practical nurse an individual must successfully complete a prescribed course of formal training and pass the state's licensing examination. By reason of these training and licensing requirements, the nursing and medical professions generally recognize licensed practical nurses as being qualified to render nursing services in all but the most acute or complex cases.

As is true in the case of registered nurses, licensed practical nurses are frequently engaged by hospitals, clinics, nursing homes, etc., on their regular staffs. In these situations the licensed practical nurses work for a salary, follow prescribed routines during fixed hours, and are otherwise subject to the direction and control of the institutions, etc., engaging them. Consequently, they are employees for Federal employment tax purposes.

Licensed practical nurses who perform private-duty nursing, as in the case of registered nurses, ordinarily have discretion in performing their nursing services. Although there may be situations where they follow the instructions of an attending physician or registered nurse, they are for the most part not subject to supervision or control by the person for whom they are rendering services. Thus, in privateduty nursing, licensed practical nurses usually perform their services under the same general conditions as registered nurses and, therefore, are ordinarily independent contractors and not emloyees for Federal employment tax purposes when performing services uner such circumstances.

The conclusion in the preceding paragraph has no application to a licensed practical nurse who is engaged primarily to perform services of a household nature as distinguished from services involving the care of a private patient since under these circumstances she would be performing services as an employee for Federal employment tax purposes.

As in all situations where a determination as to the existence of either an employer-employee or independent contractor relationship is required, the complete factual data and all circumstances must be considered. The pertinent factors which must be considered are (a) the type and nature of the services performed; (b) the control exercised and by whom; (c) whether the individual is a licensed nurse; and (d) evidence establishing whether or not the services were performed in the conduct of an independent trade, business, or profession.

Nurses' aides, domestics, and other unlicensed individuals who continue to classify themselves as practical nurses are, in general, insufficiently trained or equipped to render professional or semi-professional services according to the professional concept of `nursing.' Their services are normally those expected of maids nad servants, i.e., bathing the individual, combing the individual's hair, reading, arranging bedding and clothing, preparing and serving meals, and occasionally giving oral medication left in their custody. As these and similar tasks are normally performed by domestics, the individuals performing them are, like other domestics, subject to virtually complete direction and control in the performance of the services regardless of whether they work for a medical institution, physician, or in a private household and, therefore, are employees for Federal employment tax purposes.

The Self-Employment Contributions Act of 1954 (chapter 2, subtitle A, Internal Revenue Code of 1954) imposes for each taxable year a tax on the self-employment income of every individual. Thus, it may be stated that generally if a nurse is not an employee for Federal employment tax purposes the provisions of the Self-Employment Contributions Act may be applicable. Therefore, determinations whether tax liability may be incurred under that Act should be made with due regard to the applicable income tax provisions of the Code since an individual's status as a self-employed individual is initially dependent upon whether he is engaged in a trade or business. Doubtful cases should be submitted to the Internal Revenue Service for specific rulings.

Mim. 6658, C.B. 1951-2, 168, is hereby superseded.