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NFT: Employer fraud question

LatHarv83 : 4/10/2018 2:24 pm
I have a cousin who was hired this summer for a job. The boss lied to him from the start about several different aspects of the work, from hours to pay to benefits.... when it came time for first week pay it came as a surprise that pay was off the books. Nobody told him this beforehand.

Now I myself am not a stickler for the law but this boss and my cousin had some very personal beef that took things left. Upon leaving he went scorched earth and reported the boss for his illegal practices and received word from the department of labor that this boss will be audited

My cousin worked there for a little over a month... when they inevitably find proof of this bossís illegal practices is my cousin going to be in any potential
Hot water legally for accepting those payments for the month? This is partly why I advised him not to rat, but he did anyway. Iím asking on his behalf if anyone has info here itís appreciated
Nothing illegal about working off the books  
Jim in Fairfax : 4/10/2018 2:30 pm : link
But he is required to report the income to the IRS and make estimated tax payments on it. I would recommend he do that in case his income gets reported. Failure to do so would result in the IRS assessing penalties.
LatHarv83 : 4/10/2018 2:33 pm : link
Iím very close to this cousin, we have the same guy do our taxes because I havenít the slightest idea how myself. They got completed last week. I donít believe he reported the income, he probably never thought to do it because this was almost a year ago and he barely worked there. But the employer didnít even know his last name and only really knew him
By a nickname, so itís probably unlikely this guy is gonna report his income even if he wanted to
And just out of curiosity  
LatHarv83 : 4/10/2018 2:34 pm : link
Whatís the worst case scenario penalty if he didnít report 6 or so weeks of income ?
RE: And just out of curiosity  
section125 : 4/10/2018 2:40 pm : link
In comment 13908039 LatHarv83 said:
Whatís the worst case scenario penalty if he didnít report 6 or so weeks of income ?

Up to the TRS, but on the 1040 it asks if you have any other income. So it could be evasion.
So he would also owe FICA and Medicare at 7.65% on top of income tax and may owe the self employment tax which is the other half of the FICA that the employer did not pay.

He can always get an extension and re-file, 4 months.
Section I canít make sense of that  
LatHarv83 : 4/10/2018 2:45 pm : link
Long story short he made just short of 5,000 dollars over 6 weeks. He canít possibly owe a penalty of 5 k or more Iíd assume right ?
I would assume that if this employer does try and claim my cousins  
LatHarv83 : 4/10/2018 2:49 pm : link
Wages, he would need to produce proof right? All he got was envelopes full of cash and the boss never knew his last name

Am I wrong to think itís highly unlikely he would even have to bother with the tax re-file headache because this is unlikely to get back to him?
RE: Section I canít make sense of that  
Beer Man : 4/10/2018 2:50 pm : link
In comment 13908057 LatHarv83 said:
Long story short he made just short of 5,000 dollars over 6 weeks. He canít possibly owe a penalty of 5 k or more Iíd assume right ?
Depends if you factor in the lost income while he is serving his sentence behind bars.
Beer man  
LatHarv83 : 4/10/2018 2:53 pm : link
So jail for 5 weeks of off the books Income?

We ainít talking about Wesley snipes. Dudes a landscaper
With no criminal record Iíd add  
LatHarv83 : 4/10/2018 2:56 pm : link
So Iím just gonna call bullshit on him going to jail lol
On a positive note,  
MOOPS : 4/10/2018 2:59 pm : link
he may very well be entitled to a Whistleblower award.

Link - ( New Window )
I donít condone snitching but this dude deserves what he gets  
LatHarv83 : 4/10/2018 3:03 pm : link
Thereís no need for a backstory here but suffice to say if this dude loses it all oh well

At his core heís truly just an awful human being based on things that transpired but I donít need to to into that
Iím gonna talk to my cousin about refiling just in case  
LatHarv83 : 4/10/2018 3:05 pm : link
For such a small sum of money it isnít worth any potential headache, as hard as it is to believe that one could even arise
jurban : 4/10/2018 3:13 pm : link
5 to 10....hard labor
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