Final answer:
A broker may pay for office supplies and phone expenses for independent contractors based on the contractor agreement, but must comply with IRS guidelines to avoid misclassification issues.
Step-by-step explanation:
Whether a broker can pay for office supplies and phone expenses for salespersons who are independent contractors depends on the terms outlined in the independent contractor agreement. Generally, independent contractors are responsible for their own business expenses. However, brokers may choose to provide certain amenities or reimbursements as part of the contractor's compensation package or for operational efficiency reasons. Compliance with the IRS guidelines for independent contractors is crucial to avoid reclassification as employees, which would lead to different tax and benefit obligations.