Taxes problem with a lack of a w2?

Question

My little brother worked the summer of 2004 for a landscaper. He was paid weekly with a company check that never withheld any taxes, Fica etc. However, my brother worked 40+ hours a week from May until August thinking he was a seasonal employee. When January 2005 came around and my brother never got a W2, he called the landscaper. The landscaper told him he didn't get a W2 because he was "subcontracted labor" and also said he couldn't provide my brother with proof of how much he paid him that year due to a misplaced records. My brother couldn't get his bank records because he had none. He cashed his checks at a check cashing store. Then he does his does his taxes based on what he thinks he was paid. Now he has recieved a letter from the IRS stating he owes them almost more then he earned that summer in taxes and fees. The landscaper has since gone backrupt. Any suggestion on how to help this poor dumb struggling college kid straighten this situation out?

My brother claims he never recieved a 1099 or any documentation from the landscaper.

Answer 1

He can use Form 4852, Substitute for Form W-2, Wage and Tax Statement.

Tell him to contact the IRS for assistance at 1-800-829-1040.
When he calls, he should have the following information handy:

The employer's name and complete address, including zip code, the employer’s identification number (if known), and telephone number

His name and address, including zip code, Social Security number, and telephone number; and

An estimate of the wages earned, the federal income tax withheld, and the dates he
began and ended employment.

Then refile for the year.

Have a nice day.

Answer 2

As sub contract labor your brother would get a 1099 from the landscaper not a W-2. Apparently the landscaper filed a 1099 with the IRS otherwise they would not be sending your brother this notice.
You need to see if you agree with the tax calculation that the IRS sent you as far as the tax due is concerned. The notice should tell you the amount that the landscaper reported that they paid your brother.
The reason the amount due would be so high is that the IRS is assessing penalties and interest on the amount due. The penalties are for not paying the tax, not filing the tax return and could also include not making estimated tax payments. Penalties may be abated by the service for reasonable cause, you would have to talk with them.
Also, in 2004, your brother should have been able to make almost $5,000 without having to pay tax. When you say they are billing him almost as much as he earned it doesn't make sense. You might want to get a 2004 return prepared based on the income reported to the service to see what is right. I say use the IRS income number because your brother doesn't have any records to disput this and since the Landscaper is out of business he isn't going to be much help. Another example of a small business taking advantage of kids that they employ.
One final point would be that if your brother had had a bank account that he deposited his checks into he would have records available to dispute what the landscaper has reported to the service. Why pay a fee to cash a check when a bank does it for nothing and you have a record of the transactions.
Good Luck!

Answer 3

Your business corporation don't have replaced your withholding. seem on your paystub and note if it shows your withholding, so a techniques as unmarried or married and the shape of exemptions claimed. you probable had a lot less held out because you made a lot less. once you deduct the established deduction and exemptions and what became withheld out of your examine will you owe taxes? If no longer adequate is being held out you could substitute your W-4 or ask for a particular $ quantity to be held out each and every week.