TonyB wrote:
- quote -

....

- quote -

I would say, not if you want to continue working for them.
In some cases, reporting tax evasion to the IRS can get you
10% of the tax collected, but, for this PARTICULAR evasion,
the company would have to become aware that it was YOUR
1099 that was involved, even if they weren't formally aware
that you were complaining.

Retaliatory termination is also illegal, but difficult to
prove.

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Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

So, are there any incentives for reporting this type of
illegal behavior?

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TonyB wrote:

- quote -

Consequences: The employer avoids reporting it on their
employment tax returns. This probably doesn't make MUCH
difference, as most of the employment tax tops off at a
wage base of $7,000 per employee per year, but it might
reduce your unemployment benefits. If you accept their
allocation, you have to file a 1040 Schedule C and pay
self-employment taxes on the amount.

As for FICA and income taxes, it's essentially equivalent
of them properly paying you $1900*92.35%, except there's
no income tax withholding. (And it IS illegal.)

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

The award trip was paid for by the employer, and the 1099
came from the employer; it did not come from a third party.

What are the ramifications of it being reported on a
1099-misc instead of a W2? Is it better for us that it was
reported on a 1099-misc instead of her W2? Is this employer
avoiding paying taxes by doing it this way? (If so isn't
this illegal?!?)

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TonyB wrote:

- quote -

W2.

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TonyB <TonyB2987[at]hotmail.com> wrote:

- quote -

If paid by her employer it would be wages but if paid by --
say the manufacturer, it would be prizes & awards.

Example:

Employer is John's Big Car Sales, and your wife met some
nice sales figure which qualified her to a bonus from GM.
That's a prize/award from the manufacturer, which might have
been funneled via the employer.

It is taxable income but no self-employment income is due.

Line 21 as prizes & awards,

Mike Wing pointed me to IRS Pub 3204 a few weeks ago.

The auto industry calls this payment a SPIFF.

But I've seen spiffs in other industries. For example, a
furniture salesman who gets an award from a matress
manufacturer.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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TonyB wrote:

- quote -

Yes indeedy, it should have been on the W-2. But since it
wasn't, don't worry about it, just report it on line 21.

Cheer$,
Harlan Lunsford, EA n LA

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My wife (along with everyone in her office) received a
vacation for meeting a sales goal for the year. The employer
gave her (and everyone else) a 1099-misc for the amount of
the vacation (~$1900).

From Page 3, under the section titled 'Bonuses and Awards'
at the following link, it looks like it should be on her W2.
http://www.irs.gov/pub/irs-pdf/p17.pdf

Should this amount have been reported on her W2, or should
it indeed go on a 1099-misc?

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