What is my recourse?

"There is no honor among thieves" still applies.

I'm going to stop here and suggest you need an accountant or enrolled agent of your own, maybe even a lawyer. You handled payroll? You didn't see anything wrong? You could be exposed to a lot more than your own tax liability if you were the one who should have been seeing to the withholding and payment of taxes.

-- Phil Marti Clarksburg, MD

You worked for him, at his place of business, on a schedule he determined, at his direction, and under his control. You are therefore almost certainly (99% sure) an employee and not an independent contractor. As such, he is required to withhold income tax and the employee's share of payroll taxes, and also required to pay the employer's share of the payroll taxes. Without a W-4 or W-9, he is required to withhold from each payment he makes to you at the highest applicable rate (without checking in the books, probably about 28%, but I'm sure that someone else will correct me on that one if I'm wrong). Since he's already in audit, he'll get caught on this one real quick, and it may very well screw up any ability he might have to get an offer in compromise or a settlement of his unpaid tax liabilities. As far as your obligations are, you should fill out a substitute W-2 (get from the IRS website,

It seems to me you were an employee. Furthermore, only part of your salary should be deductible by him, since some of what you did was personal rather than business.

Ask the IRS.

It looks like he's trying to avoid you talking to the IRS.

Seth

You ask what your tax obligations might be. Regardless of how this plays out, you declare the income regardless of how it is reported on whatever flavor of 1040 you use, and you are liable for federal, state, and local income taxes on that income. If you are an independent contractor, you're also going to owe some additional taxes related to self-employment. You say to are going to have to sue the "friend" for salary owed. That won't affect your tax situtation, other than that you might be able to deduct the costs of the lawsuit (in general, you can deduct legal expenses related to the generation or collection of income). The contractor vs employee issue is something that you might bring to the attention of your state labor commission. It sounds to me like the IRS would rule that you are an employee, not an independent contractor, and your "friend" would be held liable for your employment taxes. A possibly helpful link:

-- John D. Goulden

I'm not exactly sure what you mean by recourse. If your talking legally, maybe you should post in the legal forum. As far as Accounting and taxes go, your poor judgement has left you in a situation where your holding the bag. Sorry. As far as taxes go if you receive a 1099 you would claim it on Sch C Profit and Loss from a business. You will be responsible for Self Employment taxes on the profit. 7.65%. It sounds as if you have racked some up expenses working for this guy(which you can deduct against the profit), but it also sounds like a lot of stuff you did was out of freindship, so you may/maynot get those deductions. Whatever the scenario is, chalk it up to a learning experience and unfortunately it looks as if you may need a good accountant now.

Question. Since you didnt' fill out a W4 or W9, does he have your social security number? If not, do not provide it to him until and unless you are sure he will do right by you and file W2 forms. Yes, you were an employee and that's for sure. When you file your tax return, absent any W2 OR 1099 from him, use a form 45... uh... whatever it is called Substitute W2 form. I just bet you did remember to write down his FEI # so that should help in filling out that form number 47.. uh... whatever. 4752? Forget about the three weeks pay. You'll no see a penny of it. ChEAr$, Harlan Lunsford, EA n LA

Contact your state's Wage & Hour department. They can get you your back pay and potentially help establish that you were an employee. For the hours you did work related to hit child and mother, you were by definition a household employee. That pay goes on Line 7 with the notation "HH," which means you were a household employee who didn't get a W-2. (Although Wage & Hour may be able to get you a W-2 for that, too.) Phoebe :)

This is common in Arizona. You are now responsible for federal tax, social security, and medicare. Write off as much as you can that came out of your pocket then your taxible income is figured on self-employment tax form Schedule SE. GOODLUCK!!!!

I am not a tax specialist, but I have 26+ years experience with DOL. You are an employee. Tell me, did you ever get paid? If so did you receive a sum less than your hourly rate x hours worked such that you could reasonably assume that SS and income taxes were deducted? If so the presumption will likely be that they were deducted from your pay and not remitted to Uncle Sam. If not then you will owe income taxes and your half of SS taxes. Start making a list of the paychecks you did receive, try to find any stubs that were attached. Reconstruct your financials with this guy even if you were paid cash.