Independant contractor

You assume I was making alot of money. Ha !

 

He never said that the IRS contacted him. This is what he said.

Recently I received in the mail confirmation from the IRS that a previous employer that was claiming I worked there as a contractor was in fact wrongfully misclassifying me as such . The IRS has corrected this and now I am classified as a employee.

From his post I assume that the IRS got back with him about something that he previously contacted him. He received "confirmation."

This means that the 13% tax that I had to pay over the last two years will be refunded to me .

It sounds to me as though he was paying his taxes over 2 years and decided to try and get the IRS to go after the carrier. He must have gotten caught for not paying his taxes since he was paying them over such a long period.

I am not attempting to validate anyone. Nor am I defending the company. I feel that if you make an agreement you should keep up your end of the agreement. Just because it might cost you a little money or be uncomfortable doesn't mean that you should not do what is right. If you make an agreement you stick with what the agreement states. If you don't want to follow through with the agreement then don't go to work for the company. I don't know anything about the company. I also don't know anything about the poster. I don't know who is right and who is wrong. We only hear one side of the story. I am not one who jumps to conclusions without having all the facts.

 

I don't need to go to the IRS website to read the rules on this. I have spoken to them about this issue as well as read their publications. If the company took income taxes out on you but not FICA and Medicare taxes then he was wrong. If you felt that it was wrong then you should not have stayed with them after the first paycheck. After you stayed then you essentially agreed to go along with the way that they paid. I am not condoning what happened. We only have part of the story. If you agreed to work as a contractor then you should not have turned him in to the IRS. You should have either left the company and found another job or just paid your taxes to the government. That is what I would have done. I have worked under a 1099 and I would never have thought about turning in the company to protect myself. I paid my taxes as I agreed when I went along with working under a 1099 so it was a non issue.

 

If the worker is paid on a 1099, then he is responsible for paying his own social security. If he blows his money instead of paying his taxes, then it is his fault, not the company. If you don't have the discipline to pay your own taxes, then don't contract with a carrier that pays on a 1099. If you are not responsible enough to take care of your own taxes then go with a company that pays on a W2. Don't agree to work on a 1099 where you are responsible for your own taxes and then whine to the IRS when you get caught for not paying your taxes. Don't turn on the company and plead ignorance for your failure to take care of your responsibilities.

If a driver is involved in an accident he is could be responsible, but lawyers will go after the deep pockets, and that is usually the carrier. If the contractor was negligent his estate could also be held responsible. Lawyers know that they stand a better chance of hitting the lottery by going after the carrier and their insurance company. If you work on a 1099 just man up and pay your taxes and it will be a non issue.

 

You think that if it was being done legally like you state in many posts that the IRS would not have done anything.

Apparently, they must think it is wrong.

 

I think that the IRS will go after the one whom they think they can get the money. I believe this poster stated that the company was taking some deductions out but not all tax deductions. If the poster only paid 13%, then something is not right since the social security and/or self employment tax is 15%. If the company was taking any taxes out of his pay then that may be how they were able to hold him accountable. We only have his word on what happened.

 

IRS does not care in this situation.

If the "1099 employee" has paid all of the taxes and everything is fine, the IRS still looks at the misclassified employee. They will restate the 1099 employee and convert to the correct classification assessing all taxes. SS, Medicare, withholding taxes. Then they will collect these taxes. Then the 1099 employee will have their tax return amended by the IRS and refunds are issued.

The actual deduction for the Self Employment tax works out to 13.3xxxx %. This is because a deduction for the half is taken into consideration. I did not post the exact percent, because I did not want to dig out the tax computer for the program.

 

I doubt the IRS would even notice unless the contractor said something or failed to pay his taxes. It should not make any difference to the IRS as long as they receive the taxes. I have worked on a 1099 before and have never heard anything from the IRS about it. But, I always filed my taxes. I would never have thought about having the IRS go back on a company after I agreed to work on a 1099. That is about as low as someone can get.

 

This coming from someone with vast experience dealing with the IRS.

I really doubt you have a clue.

In the case of the driver who got a 1099 and went to file their tax return. They filled it out as a self employed and tried to take some expenses against the income. They mailed the return and then got a letter from the IRS questioning their business. They listed their occupation as a driver, a schedule c with no assets, and it flags it.

This time an agent may have looked a bit closer and seen the whole picture.

It does not always have to be reported.

It will not surprise me to see more of this.

Skirt the laws, you pay the price.

 

"It will not surprise me to see more of this."

It wouldn't surprise me either. I have seen them in action going after contractor/sub-contractor relationships in the home building sector. Lots of subs wound up as employees, and lots of contractors owed lots of $. They'll get around to transportation. Remember, it's not only the tax $, the lost workman's comp $ also are at play here.