My boss asked to call in the payroll @ 40 hours, to pay employees O.T. with a co. check 80%, Is this Tax Evasion? That is he only paid them 80% of their overtime, and I don't think he is planning on reporting it. What should I do if I am the bookkeeper? Am I involving myself in illegal accounting practices, if I call in the payroll? We also have a CPA. Or is the CPA the responsible one?
2006-07-27 08:04:09 · 6 answers · asked by Jose S 1 in Business & Finance ➔ Taxes ➔ United States
The Fair Labor Standards Act (FLSA) requires employers to pay overtime to employees that work more than 40 hours per week. Overtime pay is calculated at 1.5 times the regular rate of pay for the hours WORKED over 40. If you have a payroll of only 40 hours for the week, there is NO overtime due.
This situation is not tax evasion. If overtime is required, your boss is violating FLSA. If anyone complains to Wage & Hour, or hires an attorney, back wages, interest and penalties will be due --- as well as attorney fees.
2006-07-27 08:19:55 · answer #1 · answered by #girl 4 · 0⤊ 0⤋
I agree with 3eleven. This is both tax evasion (your employer is underpaying payroll taxes) and a violation of labor laws in that the overtime is not being adequately compensated. You should know that if payroll taxes are not properly reported and paid, the IRS can go after "responsible persons" - i.e. those responsible for filing the returns and paying the tax. That could be you. I think you should look for another job with an ethical boss.
2006-07-27 13:02:39 · answer #2 · answered by taxmannyc 3 · 0⤊ 0⤋
The CPA is not the responsible one - your boss is. However, you should notify the CPA of what he is doing. I am a little confused on what you are trying to say - how do you know he doesn't plan to report it? Is it being run through a payroll company? Perhaps if you call your CPA and explain a little more, they should be able to assist you.
2006-07-27 08:54:56 · answer #3 · answered by aka Astra 2 · 0⤊ 0⤋
I'd check with the CPA before doing it. Sounds kinda fishy to me-- although I'm not a CPA.
It if turns out to be illegal and it comes around to bite your boss, you could be in trouble too (e.g. an accomplice)
2006-07-27 08:12:52 · answer #4 · answered by dapixelator 6 · 0⤊ 0⤋
It is absolutely incorrect......you may not be in a position to refute the process without drawing undue pressure. I would seek other employment asap.
2006-07-27 11:01:23 · answer #5 · answered by 3eleven 4 · 0⤊ 0⤋
get out of there - illegal.
2006-07-28 02:59:58 · answer #6 · answered by vegas_iwish 5 · 0⤊ 0⤋