What condition would typically classify someone as a statutory employee for tax purposes?

A statutory employee is classified based on specific tax laws that determine the employment relationship for tax purposes. This classification is important because it allows certain workers, who may otherwise appear to be independent contractors, to qualify for employee benefits such as employer-provided health insurance, retirement plans, and unemployment compensation. Statutory employees typically include certain types of workers like drivers and salespeople, who meet the criteria set forth by tax regulations.

The correct option, which refers to being designated by specific tax laws, emphasizes that this classification is not left to individual interpretation but is defined by regulations established by the Internal Revenue Service (IRS). This definition is essential for workers to correctly file their taxes and for employers to properly report income and withhold taxes.

In contrast, the other options pertain to factors that do not inherently create a statutory employment status. Independent contractors and freelance workers operate under different tax classifications, where they are generally responsible for their own taxes and do not receive employee benefits. Being paid in cash without tax documentation does not confer any special tax status and could lead to complications regarding tax compliance.