How to file when W-2 is denied?

Question

My friend has been working as a P/T assistant, a day per week, in NYC. She was told that she has to pay all the taxes, which meant she will be an independent contractor. Nothing was written.
After six weeks she had an work accident. She sought medical attention. At the hospital, she asked that the bills will be sent to the employer, as if she was an employee. Soon after that she was fired, proving once again that she was actually an employee. She also had fixed hours, was paid by the hour, on the employer's premises, with employer's tools etc.
The employer refuses to pick up the bills, as if she wasn't an employee. In order to avoid the huge bills (which should be taken care by the employer's insurance), I believe that she has to file as an employee (correct me if I'm wrong).
She has an open choice, since the employer didn't sent her any W-2 or 1099 (and probably he didn't send anything to IRS either).
How should she file? Does she stand any chance to claim she was an employee?

Thank for those who tried already.
I have to emphasise that my friend and the employer agreed verbally that she would be an IC. Personally, I don't think that she and him can decide on that better than the law, that's why I asked this question.
Being an IC will force her to pay the medical bill, so I think she definitely has to do whatever she needs to hold on to her position as an ex-employee.

Answer 1

I am not sure about the answer from the first poster.
She probably should treat it as though she was a contractor. She should receive a 1099-MISC by law. The employer is not responsible for those taxes, your friend needs to file as if she will get a 1099.
As far as the medical bills go, even contractors working on premises should be covered by the insurance for the Employer, not the employee. The medical bills should either be covered by workman's compensation or liability insurance.
If someone comes to your home and is injured while working in your home, they can hold you liable depending on the circumstances. In some cases your homeowner's insurance will have to cover the accident, in other cases, the contractor should have insurance for his own work induced injuries, such as falling from his own ladder.

Answer 2

It sounds like your friend was indeed an emplyee - who was being treated as an independent contractor by the employer so the employer could save money and liability.

the IRS says:

"You do not necessarily have to "have a business," but simply perform services as a nonemployee to have your compensation treated this way. The payer has determined that an employer-employee relationship does not exist in your case. That determination is complex, but is essentially made by examining the right to control how, when, and where you perform those services. It is not based on how you are paid, how often you are paid, nor whether you work part-time or full-time (or wether they send you any paperwork). There are three basic areas that are relevant to determine employment status:

* behavioral control,
* financial control, and
* relationship of the parties

For more information on employer-employee relationships, refer to Chapter 2 of Publication 15, Circular E, Employer's Tax Guide and Chapter 2 of Publication 15-A (PDF), Employer's Supplemental Tax Guide."


(This is the part your friend will want to follow up on):

"If you think that you were, or are, an employee and you would like the IRS to issue a determination, you may submit Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding."

After they make a ruling (if it's in her favor) then she can deal with the issue of the work-related injury. It will not be a quick or easy process.

Answer 3

If she feels that she should be treated as an employee she should file a form SS-8 "Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding" with the IRS. Here's a link: http://www.irs.gov/pub/irs-pdf/fss8.pdf

If the determination is made that she is an employee and not an independent contractor she should receive all benefits normally ascribed to employees.

BTW, merely being "fired" does not make her an employee. ICs are "fired" as well. However, the other conditions mentioned may well result in a favorable determination for her employee status.

Answer 4

An independent contractor is responsible for his/her own records. Do you send your mechanic or home contractor a 1099 or W-2 for the work they did for you...no.
Can you fire your mechanic or home contractor if you no longer want them working for you?...Yes, it does not make them your employee.
If a contractor comes to your home and gets hurt on the job would you expect to pay his medical bills?...no, he has insurance.
The company she worked for will deduct her "fee" (not salary) as a business expense.