Taxation without representation?
March 18, 2009 8:01 AM Subscribe
I suspect my former company is guilty of tax evasion after paying me like a freelancer instead of a full-time employee, unless I'm operating under a serious misconception of tax rights. I quit under duress, but now I'm filing taxes and I'd like to report their behavior if it has indeed been inappropriate. Please tell me whether or not I'm right to do so, and if so, how I should report them to the IRS with very little concrete evidence other than hearsay and my own 1099 form.
posted by zoomorphic to work & money (21 answers total) 4 users marked this as a favorite
I was hired as an assistant editor at a small company with the verbal promise that after a trial period, I would be put on payroll and given benefits. This never happened, and the company eventually fired the rest of the editorial staff and placed me in charge of everything. I was always paid like a freelancer, despite working 50 hours a week without any of the freedom of freelancing and all the expectations of a typical employee. None of my taxes were ever deducted. Naturally, this means that I am officially obligated to pay my full payroll tax, something like 12.4% of my income, rather than the 6.2% I'd pay if I were acknowledged as a full-time employee.
The company has also refused to take out the taxes of less freelance-y folks, like the office assistant. They laid-off my co-worker and then covertly re-hired him, now paying him under the table in cash. The CEO suggested that the guy collect unemployment on top of his weekly salary.
I'm not a tax lawyery expert, but this is all pretty illegal, right? My problem is that I quit abruptly under the pressure of the low pay, lack of insurance, and other mundane degradations that the company unleashed on its staff, so I never gathered evidence to support my claims. If I call the IRS and just tell them that I suspect this company is committing tax evasion, will I have a case against them? Do I have a shot at recovering half my payroll tax, or did I screw myself over by quitting in a huge huff without stealthily building my case?
I live and work in New York City. Thanks in advance for any insight.