sub-contractor verses employee

What is the name of your state? California

I have a friend who was considered a sub-contractor by his boss. His boss paid no workers comp, social security, unemployment or any other employer taxes. His taxes were also not withheld. He has a very large tax bill now. But, he was treated like an employee. He was required to work mon-fri and be there at a certain time. If he missed a day of work his boss made him work on Saturday. He was supplied with some of his tools. He was required to train new people. He was required to do his job in a certain order dictated by the boss. He was also required to do some things for free becuase his boss said that "it is part of the service". And while his boss was out of town for weeks at time he required my friend to open and close his business and run things. What can he do? Can he turn him in to the irs? Will they help him?

[JETX]

"What can he do?"
*** Pretty obvious. All this time, he knew that no taxes were being deducted, FICA was not being paid, nothing was being deducted...... and NOW he is surprised that he owes taxes!!!

"Can he turn him in to the irs?"
*** For what??? Having an independent 'contractor' working for him. Simply, this dweeb KNEW that he was a contractor and as such, should have known that taxes are due on self-employment income.

"Will they help him?"
*** Who?? The IRS?? Yes, they will 'help' him...... to pay his taxes.

For more on whether an employee or a contractor, go to:
[url]http://www.irs.gov/pub/irs-pdf/p1779.pdf[/url]
[url]http://www.payroll-taxes.com/art2.html[/url]
[url]http://www.missouribusiness.net/irs/sections/section4/empleeindepcontractor.htm[/url]
[url]http://www.awwa.org/sections/sectionlibrary/EMPLOYEEORNOT.CFM[/url]
[url]http://www.inc.com/articles/legal/taxes/emp_taxes/1840.html[/url]
[url]http://www.webs.uidaho.edu/acctspay/empvcon.htm[/url]

[abezon]

I agree with you -- he sounds like an employee. He can file a petition with the IRS to determine if he was an employee or independent contractor. If he was an employee, the IRS will force his boss to pay 1/2 the SS/medicare taxes (+ penalties + interest).

If he's really sure, he can file his income on line 7 (wages) and file a Form 4137 to pay just 1/2 the employment taxes. Cross out "Tips" & write "Wages". If he's wrong, however, he'll have to pay the extra employment taxes + interest + penalties. Up to him whether he wants to run that risk.