Body shop won't pay

[statefan]

What is the name of your state? Tennessee, shop is in Indiana

Last year (May) my husband did subcontractor work for a body shop. He earned about 7,000 for 2 weeks work. Getting the owner of the body shop to pay has been next to impossible, but over the year he has paid it down to $1700 or so. He also owes my husband's friend about $20,000 from the same time.
Over the past year, I have received 1 money order and 2 checks written by another company he has no relation to. We have also found out he and his body shop have many, and I mean many civil judgements issued against him, along with a frozen bank account (hence the other company). He has also failed to issue both my husband and his friend 1099s for their money earned (whether it was paid or not).
Two questions, is using another company's account to pay his debts a form of money laundering? and would contacting the IRS be a legitimate avenue to pursue, because I know he is not reporting that income?What is the name of your state?

 

[ForFun]

Two questions, is using another company's account to pay his debts a form of money laundering? and would contacting the IRS be a legitimate avenue to pursue, because I know he is not reporting that income?What is the name of your state?

No, the simple act of one entity paying the bills of another entity is not money laundering.

You're free to contact the IRS, though I don't know why you would bother. How could you possibly know what is being reported, and even if you did, how will it help you? Why don't you sue this company instead?

 

[TomD1974]

What is the name of your state? Tennessee, shop is in Indiana

Last year (May) my husband did subcontractor work for a body shop. He earned about 7,000 for 2 weeks work. Getting the owner of the body shop to pay has been next to impossible, but over the year he has paid it down to $1700 or so. He also owes my husband's friend about $20,000 from the same time.
Over the past year, I have received 1 money order and 2 checks written by another company he has no relation to. We have also found out he and his body shop have many, and I mean many civil judgements issued against him, along with a frozen bank account (hence the other company). He has also failed to issue both my husband and his friend 1099s for their money earned (whether it was paid or not).
Two questions, is using another company's account to pay his debts a form of money laundering? and would contacting the IRS be a legitimate avenue to pursue, because I know he is not reporting that income?What is the name of your state?

No, the fact that you received a check from Company A for payment of Company B's debt is not indicative of "money laundering". I think what you really mean by that is that you think it indicates "tax avoidance" and that's why you want to contact the IRS.

This may be surprising to you, but the IRS isn't likely to launch an investigation just because you call or e-mail them with this kind of information. Rather than trying to "get even", why not just sue the body shop? You will need to be able to prove that there was a contract, of course. You probably already have some proof, based on some payments and hopefully some written communication. But keep in mind that if they already have these supposed "civil judgements" outstanding, you may be waiting a long time for your money, even in the off chance that you are successful!

BTW, absent the 1099 that your husband was supposed to receive, did he still declare he income?

 

[statefan]

No, the fact that you received a check from Company A for payment of Company B's debt is not indicative of "money laundering". I think what you really mean by that is that you think it indicates "tax avoidance" and that's why you want to contact the IRS.

This may be surprising to you, but the IRS isn't likely to launch an investigation just because you call or e-mail them with this kind of information. Rather than trying to "get even", why not just sue the body shop? You will need to be able to prove that there was a contract, of course. You probably already have some proof, based on some payments and hopefully some written communication. But keep in mind that if they already have these supposed "civil judgements" outstanding, you may be waiting a long time for your money, even in the off chance that you are successful!

BTW, absent the 1099 that your husband was supposed to receive, did he still declare he income?

Thanks for the replies. At this point, we are not going to file a small claims suit against him. Frankly, it would not do any good. At least we got some of the money we were owed. We do have all the paperwork from the jobs my husband performed for this man, as well as copies of the checks/money orders already received with the invoices paid marked on the checks, so proving we are owed this money is no problem. Actually getting paid on a judgement seems next to impossible.

Luckily, we did report the additional income less the money we are still owed without the 1099. In his business, the IRS is too quick to audit, you have to take every precaution, crossing t's and dotting all i's.

I thought it was a stretch for the money laundering, but everyone seems to have advice, just thought I would ask. Annoying and persisting this man might be the only way!

One more question, would posting anything negative about this man and his body shop on a public forum, warning others not to do work for him, would that be considered slander?

 

[TomD1974]

One more question, would posting anything negative about this man and his body shop on a public forum, warning others not to do work for him, would that be considered slander?

Maybe not slander, but libel. You need to be really careful about what you post about a person or business. If you do post your tale of woe somewhere, it should be factual and provable, and innuendo about the IRS or whatever else might be going on is not a good idea.

Remember that often people read these stories and interpret them as meaningless rants, while the business owner himself is the only one taking it seriously and starts firing shots across your bow. Be prepared for your attempt at retribution to not deliver the results you seek.