The Internal Revenue Service (IRS) establishes the criteria for determining if a worker is an employee or an independent contractor. If you have employees and not independent contractors, you must act as a withholding agent on both the federal and state levels.
Internal Revenue Service (IRS) Information
Review the information on the IRS web page Independent Contractor (Self-Employed) or Employee?
If you want the IRS to determine whether or not a worker is an employee, file IRS Form SS-8 (pdf) (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the IRS.
To talk to an IRS tax specialist, call 800-829-1040.
Iowa Workforce Development (IWD) Information
Review the information on IWD's web page Misclassification of Workers in Iowa.