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Discussion Starter · #1 ·
Ok fellas I had a "Guy" do work for me years ago. We agreed he would get 1099 and I in no way would be his boss or any of the criteria that would make me an employer. Welllll he applied for a job and use me as a past employer. So I was sent a form to file out stating my case. That was two years ago the IRS just sent me a letter saying it was reviewed and he is a employee also saying if I fight it then it could open grounds for a audit. He worked for me for 3 years. Has anyone had this happen and what kind of poop storm am i about to go through as far as redoing my taxes for those years.... THANKS GUYS..
 

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He worked for me for 3 years.
Call a lawyer that deals with this type of thing. Depending on the details of your arrangement, you may likely not have a leg to stand on....sorry.

It would also behoove you to contact a moderator and have this thread pulled from view.
 

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Discussion Starter · #4 ·
It said do work for me....Im a subcontractor to Servpro and I do work for them, I dont think I phrased it wrong...Im going to call them tomorrow I was just wondering what all I would owe...He averaged out like 10 grand each year...trust me Im going to lay down belly up....I hope the take payments
 

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It said do work for me....Im a subcontractor to Servpro and I do work for them, I dont think I phrased it wrong...Im going to call them tomorrow I was just wondering what all I would owe...He averaged out like 10 grand each year...trust me Im going to lay down belly up....I hope the take payments
Figure a third or so of what you paid him. Hopefully he paid his self employment tax and filed correctly. Then there's the insurance thing. Yikes.
 

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Discussion Starter · #6 ·
he did file his taxes so I assume he paid. Why would I owe a third I thought all I would have to pay into is Social Security and Medicare aka FICA.
 

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he did file his taxes so I assume he paid. Why would I owe a third I thought all I would have to pay into is Social Security and Medicare aka FICA.
If he reported them and paid them correctly, your in much better shape, but usually they don't. I have watched 2 friends go through this.

I didn't mean to be an alarmist, but I saw one go down very badly.
 

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tread lightly here..firs of 10k is not alot of income he earned..

you could make a case that he was an independent contractor and NOT an employee based on that and your issuance of a 1099..

however you will have to prove via COI, W9 that he was not an employee..if you can do that you may be oK
 

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tread lightly here..firs of 10k is not alot of income he earned..

you could make a case that he was an independent contractor and NOT an employee based on that and your issuance of a 1099..

however you will have to prove via COI, W9 that he was not an employee..if you can do that you may be oK
It takes a lot more to prove they're not an employee than just coi, w9, and issuance of a 1099.
The irs lists the guidelines on their site it would behoove everyone to look that up.
 

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It takes a lot more to prove they're not an employee than just coi, w9, and issuance of a 1099.
The irs lists the guidelines on their site it would behoove everyone to look that up.
True, however those that I listed is a start, especially for a 10k sub..
 

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I'm sorry, but even in your original post, you stated that "he worked for you for 3 years"....I've seen this so many times, where people 10-99 their employees, calling them independent contractors so all of their business is under the table. I wish you luck, but this isn't looking good.
 

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Unless you can show he did work for other people, that he submitted invoices to be paid, that you provided him with a 1099, he submitted that at tax time along with all his scheduled expenses, had separate insurance and WC that he paid for, was in charge of his schedule and his hours were not subject to you, you are not going to be able to show he wasn't an employee in their eyes...
 

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This is a serious deal, I wish you luck.

The IRS is getting way out of hand with a lot of stuff now days, my accountant told me not to pay for scaffolding training and OSHA 10 for a legitimate sub contractor I use. Has his own company, insurance and employees, and does work for several other contractors. But because most of the work I sub to him is remodel work, it is an hourly rate. Its approximately 30% higher than what a normal carpenter on my payroll costs with burden, but I dont have to take care of his tools, trucks, taxes , insurance, ect... Not something I like doing unless we are that busy, as my margins go down or price goes up, but its a legitimate enterprise.

I have two possible commercial projects that are on a highway, I want everyone on the job OSHA certified, subs included. He told me he didnt think he'd be interested in paying for that as he has never seen an OSHA inspector. We live in a rural community, only see OSHA if there is a complaint.

I see his point, at least from his skewed logic.

I ask my CPA about the write off and she says dont do it. That can be notbing but trouble. That apparently includes the toolbox saftey talks we have been doing as well.

I am 100% for them pursuing contractors 1099 their employees, it makes it unfair for legitimate guys. But this is a separate matter and completely ridiculous. By their logic my sub contractor agreement makes my subs employees because I dictage methods of installation and products, and have acceptable working hours listed.

Tell me how any of that makes sense....
 
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