Independant contractor

If you take a job with them, you are required to make quarterly tax payments to the IRS, which include Social Security and Medicare. That is how you get your Social Security benefits.

In addition, if you want workmen's comp you are required to pay that too. This is what it means to be an independent contractor. If you don't like the terms, don't take the position. If you take the position, step up and take the responsibility that comes with it.

 

The driver is nearly always responsible for his actions on the road. That is a civil matter, but could also be criminal. It has nothing to do with taxes.

Truthfully, the IRS could care less who pays the taxes as long as they get paid. They don't care if a worker is paid on a 1099 or a W2. They just want their money. If you paid your taxes then I doubt this would even be an issue.

 

Not true.

IRS is interested in companies that hire drivers this way and have payroll to officers and such.

The reason is that this a way that they have discrimatory benefit plans and avoid costs associated to employees.

 

You are comparing apples to oranges, Roadmedic. Officers would be considered employees. That doesn't necessarily mean that everyone who receives a check from the same corporation is an employee. You have now gone from a classification of 1099 workers and paying taxes to benefits. Independent contractors are not entitled to benefits from a corporation with which they contract. They will need to provide their own benefits. If you accept a position with a company as an independent contractor, then you need to take responsibility for paying your own taxes and benefits. If you don't want that responsibility, then don't take the position. You won't be forced to take any position where you would be considered an independent contractor. But, don't take the position, fail to pay your taxes and then try to put the responsibility on the company. If you agree to be an independent contractor then you have agreed to be responsible for paying your own taxes. Do the right thing. Don't go whining to the IRS and play dumb. Rather than going after the company, the IRS should be going after the ones who agree to work on a 1099 and then try to shift responsibility to someone else.

 

Actually , when I was hired for the position I was told I was a contractor and was never told they would not be contributing to SSI and Medicare. In fact I questioned the company and was told that this was being paid . And even though I received a 1099 I filed a W2 . So I have been fighting this for a while . Right now the IRS is determining if I am a employee or a contractor . And if there is a officer in the company or "employee" that is performing the same type of job as the contractor but is being paid as a employee then there is a problem . At this company this was happening on a regular basis .
Also note I had no expenses . I was working just like a company driver but classified as a contractor.
A contractor is able to work for more than one company at a time and is able to determine their own work schedules and generally bears all expenses . I did none of these things . This company was basically trying to evade their responsibilities . And my SSI and Medicare has been paid by me so this is not a problem . However, this practice needs to stop.
I had been a contractor years ago and had gotten away from it because I was tired of the headace of bearing all the expenses . So when I applied at this job I was told that I would receive on average 50cpm . This sounded great to me . I was paid in cash for the first year ... Then after the second year I received one of those statements from the Social Security dept . The benefits had gone done from the previous year . This is when I started questioning their practices . The 2'nd year I filed a W2 even though they gave me a 1099 . I never signed a contract and it was not untill I had left this company and almost a year later that this company started having their drivers sign a contract.

 

paid .... sorry

 

Employee vs. independent contractor
According to the IRS, an employee is anyone who performs services for an employer if the employer can control what will be done and how it will be done. This was codified in revenue ruling 87-41, and is generally called "the twenty factor test". [3][4][5] Independent contractors are defined so if the payer or employer has the right to control or direct only the result of the work done, and not the means and methods of accomplishing the result. There are also other categories such as non-employees, which include direct sellers.[6]

 

You are the one that is comparing apples and oranges.

Officers are not considered employees in discussions with the IRS. Take a good long look at the Federal Corporation Income Tax Return, Form 1120. Corporation Officer salaries are separated from employee wages.

I have not gone from anything to anything. I merely stated that a position of interest for the IRS is benefits that are paid to officers.

You must think that the only business that uses 1099 contractors is just trucking. I have had major dealings with the IRS on these issues over the many years that I prepared the books, tax returns and IRS audits with the clients my company had.

Irs is very interested in the misclassification of employees to avoid the proper withholding and discrimatory methods of paying benefits only to employees (officers) of a business. These employers move toward the payment and use of independent contractors. As such, they are not entitled to benefits and also for withholding.

In a review of the business, during an audit, they examine the benefits paid to "employees of the firm" and look to see the staffing. Are they only officers? If so, then they look to see if the business can truly operate under the use of the paid employees and what benefits are offered. If they see that the business must be using independent contractors, then they look to see if they are employees and the intent of the reason behind the use of said contractors.

I had a business that decided they would incorporate and then convert all of the employees to independent contractors. This actually removed them from having to provide health insurance and retirement benefits to their newly classified independent contractors. This was a great savings since these were mainly drivers that the business used. Not truck drivers.

Contracts were drawn up and signed and recorded.

They now had a business that only had to provide benefits and salaries to the corporate owners.

All of this changed several years later when the IRS came in.

Contracts declared void.
Back wages were calculated and paid.
Withholding taxes were calculated and paid by the employer.
Benefits that were paid for the corporation officers were declared taxable to the officers and not considered a tax free benefit.


I am quite sure that I have had many more dealings with the IRS than you can even imagine.

Your company may run under the wire and never be caught. But as an Enrolled Agent to Practice Before the IRS, I am required to advise properly at all times.

It can be detrimental to a business if caught.

 

From your post I have no doubt that you knew what was going on. The company paid you for a year in cash. It sounds like you were with this company for at least 2 years, but didn't have a clue? You were issued a 1099, yet filed a W2? It sounds to me as though you have a vendetta against the company. I think that you knew exactly how you were to be paid. You should at least have gotten an idea after a couple of paychecks. You could have left if you didn't agree with how you were to be paid. You apparently agreed to be paid on a 1099. You didn't pay the taxes you know you owed and now want the IRS to beat up on the company because you are evading your taxes. It isn't the company that is evading taxes, but you. You now want to plead ignorance about how you were paid for at least 2 years? I don't buy it. You were being paid $0.50/mile yet refused to pay your taxes? At that rate you should have had enough money to pay the taxes you owe. I think that either you were mad at the company for something or when the IRS came calling for the taxes you owe, that you then decided to try to force the company to pay your taxes. It is YOUR tax obligation, not the company's.

 

I don't recall stating how I may compensate people with whom I do business. My company doesn't run "under the wire." I always pay any taxes that I owe.