As you probably saw on the IRS website, the division between an IC and an employee is not always crystal clear. The distinction between the two is a factual question. Based on the facts you provide, it's possible that it could go either way. What makes me doubtful about this arrangement is that the reasoning for making you an IC is the owner is negotiating reimbursement rates. I interpret that to say the owner isn't sure how much money he will make so he doesn't want to commit to paying you a fixed amount or offering you the benefits that come along with being an employee. That is not a permitted reason to classify somebody as an IC.
I would think long and hard about accepting that position.
Let me begin by saying that I am neither a labor & employment lawyer nor a tax lawyer, and that I would almost-certainly defer to someone more experienced in those areas for any kind of specific answer. That having been said, I think that you're quite right to be concerned about the distinction between being classified as an employee versus an independent contractor.
Generally speaking, there are several different concerns at issue when you work as an independent contractor. For instance, depending upon what kind of work you do, there may be issues of professional control; there may be third-party liability issues; and there may be tax issues (just to name a few). From the general tone of your question, I get the impression that tax issues are your primary concern. On that score, I'd say that your first instinct - to look for information from the IRS - was probably a good one. The IRS publishes (or, at least, used to publish) a general list of critera that define an independent contract, colloquially known as the "Rule of 20." A person should able to say that a majority of those criteria apply to them, and to the work they do, in order to be a true independent contractor.
Not knowing all the facts of your particular situation, it would be impossible to tell you, one way or the other, if you 'should' be an employee or an independent contractor. But, based on what you've said, I think you would be well advised to seek the advice of a licensed attorney (and, possibly, a CPA, as well) to help guide you thru this process. The one thing I can say with a certain amount of experience on this issue is that it's far better to sort these things out on the front end than to find yourself trying to fix it on the back end years later.
Best of luck!
Nothing in this is answer should be construed as legal advice. Neither the answer, nor its particular contents, is intended to create an attorney-client relationship between the person asking the question and Andrew R. Stubblefield or Coats | Rose, PC. The person asking the question should contact a licensed attorney in their area and solicit actual legal advice based upon the particular facts, documents and circumstances underlying their issue.
This is a common issue. A lot of companies try to classify workers as independent contractors for a variety of reasons, from avoiding tax withholding to avoiding the need to pay overtime to avoiding the need to provide various benefits. There is no black-and-white rule for deciding how a worker should be classified. From your description, it sounds like you would fall into the gray area. The fact that you control your work hours and will be working without direct supervision cuts in favor of independent contractor status, but in the end the determining factor will be the extent to which the company controls your work and the extent to which you control your own ability to make a profit.