This is one you should be very careful with. There are more people than the IRS who care about employee vs contractor. Your state's unemployment department is one that comes to mind. Best advice is get professional advice (accountant or lawyer).

Here are some things to do in the meantime:

1. Make sure everything is invoiced.
2. Have her do with you what you do with your clients. Create a contract that specifies services to be performed and milestones. Execute a new one everytime that changes are requested. This limits scope and duration. Do not specify where things will be performed or working hours. These establish direction and control, a major component of employee status.
3. Might be time to have an accountant do your return. Not cheap but you have professional advice. Make sure you get a CPA or someone certified to represent you with the IRS. That way they are standing there taking the heat too.
4. Go conservative. It may mean time & a little money but that's better than an audit. Remember, they get to add interest and penalties. These often will be more than the original amount.

Good luck