Is it illegal to work for an employer who doesn't pay wage taxes ?

Question

My friend worked for a bar owner who dodges taxes by not claiming the workers and in order to keep their job must not claim their wages.Curious to know what kind of trouble this can be for worker and owner.

Answer 1

So he's paying the workers "under the table", right? The owner must be claiming the expenses somehow though. There's no way he's not going to deduct his payments to them in some shape or form. But both owner and workers are committing tax fraud. And the workers are shortchanging themselves because none of what they are getting paid is being reported to Social Security as wages for them, so they aren't getting any credits towards retirement (if social security will still be there when they want to retire).

Answer 2

If your friend needs the job, I would advise him to file his wages with the IRS, otherwise he is illegally dodging his taxes and he can get in a LOT of trouble. Yes, the owner will then be caught, but that is his problem since he is a crook who is cheating the government. The important thing is that your friend should report his wages so that he will not be the boss's cellmate!

Answer 3

i desire to tell u this it occurs each and all the time us american pay taxes however the Mexicans do no longer and that i worked at sixteen diverse places everytime i rasie a stink i'm getting fired so they get funds out the door a us 3 white those that artwork there pay taxes they make over 4 grand an afternoon in sales there greek so they think of diverse I informed them they should do a 1099 tax each 12 months if u make seven-hundred a week funds no taxes experience a bicycle 2 blocks and get beyond extensive-unfold time no taxesthere are 20 emoloyees right here that make seven-hundred a week been there for ten or greater years MY question IS help I considered this persistently in returned abode

Answer 4

From both sides, this is highly illegal. You don't have to be a lawyer to figure this one out. The law requires that employers report wages and taxes. The law also requires that employees report the correct amounts of wages and withholding taxes when they file with the IRS, the state tax authority and possibly the local municipal tax authority every year. Both employer and employee could face huge fines and maybe even jail time for tax evasion. It cannot be a condition of employment to require employees to break the law. That in itself is highly suspect. Nobody should work for someone who encourages employees to break the law.

Answer 5

It's illegal for the employer to do this. If the employees don't file a tax return reporting ALL of their income, then they are also doing something illegal.

Can be major trouble for both. If and when one gets caught, the other most likely will also - and they'll both be liable for back taxes, interest and substantial penalties, along with possible prosecution.

Answer 6

I wouldn't work for them - all it would take is an audit by the IRS and the owner would be in jail, and if the employee willingly did not file taxes, but rec'd wages and the IRS traced it, they would be liable for back taxes and possibly even tax fraud. I would run screaming - the employeer probably won't be in business long anyway, as if he is not paying his wage taxes, chances are he isn't paying other taxes, and one of the government entities is going to get him.

Answer 7

The question is how is your friend reporting his/her tip income? In CA, there is a standard minimum wage. All service industry professionals are required to earn that minimum amount. However, they are also taxed on their tips. If your friend is not reporting the tips, then she is probably committing tax evasion.