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#1
10-13-2009, 10:41 AM
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Wife's Boss Tax Evading??What is the name of your state (only U.S. law)? Michigan My wife works for a small business here in Michigan. The small business is owned by two brothers who work in her office. The older brother has a larger share in the company than his younger because he was the founder 20 years ago. My wife is I guess you'd call her the controller of the company because she does the payroll, the 401k, the accounts payable, and accounts receivable. The older brother (further called owner in this post) owed a lot of personal taxes last year and has been scheming up a way to make sure his spoiled wife doesn't get him into crazy debt tax time again so he's allowed her to receive her own company credit card. My wife was skeptical about doing it because she knew why he was doing it but because she didn't want to lose her job she did it. Well when the bills were coming in that she spend $12k in one month, the owner said to put the bills under as an expense. My wife fought this and did this as an executive loan instead without telling him. At some point he found out and now he wants his wife to be on the payroll (with taxes being withheld obviously) making enough money to pay off the company credit card. My wife has an issue with this because she'd be a ghost employee (not really working there). Knowing what you know about the situation, is what the owner is trying to do illegal or common shenanigans for small business owners? Will my wife get in trouble if she does as she's told and puts her on the payroll because she doesn't want to get involved if she's committing a crime. My wife and I look at it this way, he's trying to rob a bank but he's not doing it himself, he's having my wife hire a crew of thieves rob it so he can get the job done but we think EVERYONE involved is punishable by law and we don't want anything to do with it... We were thinking about turning the company over to the IRS but we really need my wife's income because of this new economy... HELP!!!!What is the name of your state (only U.S. law)? |
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#2
10-13-2009, 11:55 AM
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It may be that the younger brother is the only one being hurt since the older brother may be taking out more than his share of the profit. If the younger brother is happy with that - it is none of your business. Had the previous situation continued with the company paying her creidt cards and expensing it, then there would be an issue of tax fraud. But as you describe it currently, there is none. BTW, your wife's job is probably hanging by a thread.
__________________ There is no withholding on the wages of sin. |
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#3
10-13-2009, 04:08 PM
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I'll also point out that theoretically, it's possible under audit that the business deduction for the wages are disallowed while the wage income is still kept so there is a risk there.
__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#4
10-13-2009, 04:22 PM
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Very few tax return preparation fees are so large that a CPA would be tempted to intentionally break the law for a client. It is also a fact that some clients lie and you are almost always told only one side of the story. Finally, it is not appropriate to disparage an entire class of tax professionals in this forum.
__________________ There is no withholding on the wages of sin. |
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#5
10-14-2009, 12:58 AM
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__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#6
10-14-2009, 01:07 AM
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__________________ * * The information I gave is based on my 7 seconds of research on Google. Review the information yourself to make an informed decision. Communication is KEY - 10 mins of talking now can save you months of headaches later! Masterfully stating the obvious to the oblivious! (Thanks SP!) Tell it like it is! When all else fails, make up a statistic!  Gender references shall apply equally to the other gender. I will not correct gender mistakes (unless I want to) |
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#7
10-14-2009, 01:34 PM
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__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#8
10-14-2009, 02:31 PM
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http://tinyurl.com/yeoq6lk
__________________ * * The information I gave is based on my 7 seconds of research on Google. Review the information yourself to make an informed decision. Communication is KEY - 10 mins of talking now can save you months of headaches later! Masterfully stating the obvious to the oblivious! (Thanks SP!) Tell it like it is! When all else fails, make up a statistic! Gender references shall apply equally to the other gender. I will not correct gender mistakes (unless I want to) |
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#9
10-14-2009, 03:12 PM
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__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#10
10-14-2009, 03:27 PM
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__________________ * * The information I gave is based on my 7 seconds of research on Google. Review the information yourself to make an informed decision. Communication is KEY - 10 mins of talking now can save you months of headaches later! Masterfully stating the obvious to the oblivious! (Thanks SP!) Tell it like it is! When all else fails, make up a statistic! Gender references shall apply equally to the other gender. I will not correct gender mistakes (unless I want to) |
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#11
10-14-2009, 03:37 PM
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I'll be sure to relay your opinion to the attendees in my next preparer penalties seminar. Since you're convinced I'm full of it anyway, tell me, what IS your opinion of a CPA who prepares a corporate return based off of an audited financial statement they prepared themselves and deducts $1 mil of travel and entertainment expenses at casinos? Hypothetically speaking of course, because we wouldn't want to classify an entire group.
__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#12
10-14-2009, 04:05 PM
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__________________ There is no withholding on the wages of sin. |
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#13
10-14-2009, 04:12 PM
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That's 1 down - hundreds of thousands to go!
__________________ * * The information I gave is based on my 7 seconds of research on Google. Review the information yourself to make an informed decision. Communication is KEY - 10 mins of talking now can save you months of headaches later! Masterfully stating the obvious to the oblivious! (Thanks SP!) Tell it like it is! When all else fails, make up a statistic! Gender references shall apply equally to the other gender. I will not correct gender mistakes (unless I want to) |
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#14
10-14-2009, 06:59 PM
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__________________ When you find yourself in a legal dilemna, ask yourself: What would Denny Crane do? |
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#15
10-14-2009, 07:16 PM
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__________________ * * The information I gave is based on my 7 seconds of research on Google. Review the information yourself to make an informed decision. Communication is KEY - 10 mins of talking now can save you months of headaches later! Masterfully stating the obvious to the oblivious! (Thanks SP!) Tell it like it is! When all else fails, make up a statistic! Gender references shall apply equally to the other gender. I will not correct gender mistakes (unless I want to) |
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