1099 Status BUT:

My auditor has all the information right in front of him. If he thinks I am legal, which so far he does, then I am not going to point out his job for him. My tax accountant of 17 years says I am breaking no laws and so far the auditor agrees. They both state as long as I am under the limit on employee's then I am perfectly fine paying via a 1099. I am located in west central Indiana.

 

Contact your accountant and show him the posts on here that clearly have links to support the truth on the IRS web site and their rules.

I personally know many preparers that do not have a clue as to the rules. They just do it the easiest way and avoid conflict with the client. Many clients become very adamant when they are advised they have to do employee records.

For instance, since 1986, it has been a requirement to satisfy the immigration rules on new hires. By doing the 1099, you are not in compliance with this rule. It has a fine that can be as high as 5,000.00 per employee.

If you have met the rules for the form I-9, then how do you explain the calling of them as employee and then not.

I have dealt with these issues since the late 1970's all across the entire country.

You are not alone, but I would be interested to see what your accountant states.


I run into other issues and bring the rules to the attention of the tax preparer and then hear them state, IT IS NOT A PROBLEM IN OUR AREA.

 

I think that it would be foolish to bring up issues during an audit or to the IRS which could encourage them to further scrutinize the target. I agree that they don't need anyone helping them to do their job. The IRS has been abusing their authority for years. We have seen reports in recent years of how they have targeted specific groups or individuals who happen to disagree with the current administration. I would not think it prudent to bring up issues which could cause them to question anything that they might otherwise give a pass. If the IRS doesn't have a problem with the 1099 and the driver doesn't have a problem with a 1099 and he pays his taxes, then it should not be an issue. In fact, unless the driver fails to pay his taxes or tries to shift responsibility to the company, then it is none of their business and fraud has NOT been committed. Criminal behavior often has as much to do with intent rather than events. If the company pays a driver on a 1099 with the expectation and/or understanding that the driver will pay his own taxes and then the driver pays any taxes due, then there was no intent or fact of fraud being committed.

 

So, you now admit it is an issue and may be wrong?

 

If you are SO certain of all that, I DARE you to post your company's information, right here, on the public forum... I'll give the IRS a little jingle and tell them how much more knowledgeable YOU are compared to them... I bet the NEXT phone call they make will put you in a cold sweat! Put your mouth where your company's survival is on the line!!! Call ME a tax cheat, will you?!?!?!? YOU are the tax cheat if you pay employees on a 1099!

 

It has never been an issue for me.

 

So, now you want to be an IRS informant?! I never called you a tax cheat, but since you brought it up......I think there must be more to the story than you have posted. Frankly, I could care less. When someone starts to attack me or others personally, they are usually trying to compensate or hide something. They call others names to defray scrutiny from themselves. Paying on a 1099 does not make anyone a tax cheat. Not paying YOUR taxes makes you a tax cheat. You sure seem quick to call names and make accusations. Perhaps you should post the letters from the IRS along with your tax returns. If what you say is correct, then perhaps it was whomever did your taxes that got the interest of the IRS. And for the record, the IRS does not get me in a sweat. I have nothing to fear from them. I have dealt with the IRS and survived for many years. I expect to continue to survive as long as I wish to remain in business. So you can keep your childish name calling and accusations to yourself.