"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

I'm not so sure the IRS is all that interested.

I employ a housekeeper who works for 5 different families. 4
of them give her a W-2 form and the 5th (let's call her Mrs.
F) did so once or twice several years back, then started
"forgetting". Even when the housekeeper kept asking her for
it, she would delay and make excuses.

The housekeeper filed Form 4852 three years in a row,
reporting the income she received. The IRS sends Mrs. F a
letter each year telling her to give the housekeeper a W-2
but she never does. Maybe it'll come around to bite her in
the rear one of these days but it doesn't seem to be high on
the government's priority list.

Anyway, when the housekeeper went to Social Security to
request benefits at age 65, they told her they had no record
of Mrs. F ever paying SS or Medicare taxes on her behalf,
even for the years that she did provide housekeeper with a
W-2.

Sue

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"Jonathan Kamens" <jik[at]kamens.brookline.ma.us> wrote:

- quote -

More likely is the oft-played script:

Nanny to SSA: "Gimmie my benefits."
SSA: "You didn't work."
Nanny: "I worked for Mrs. Gotrocks for nn years."
SSA to Mrs. Gotrocks: "Nanny says she worked for you."
Mrs. Gotrocks: "She was terrific."
IRS to Mrs. Gotrocks: "Hello."

--
Phil Marti
Clarksburg, MD

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studioat55[at]yahoo.com wrote:

- quote -

I wouldn't run for any political office till this is cleared
up.

bw

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<studioat55[at]yahoo.com> wrote:

- quote -

OK, the short answer is going to be that the appropriate
returns need to be filed or amended and sent to the
appropriate federal and state authorities, along with the
taxes that should have been paid, and some interest and
penalties that will likely be much, nuch higher than the
original amounts owed.

Employment tax problems such as this are one case where I
would advise a person not to do ANYTHING without going over
the situation with a local EA or CPA who **deals with this
issue regularly.** Forgive all of the emphasis, but issues
of having not taken care of employment tax filings and
payments is considered a very serious matter. Get some help
from someone who deals with this on a regular basis. Yes,
you will have to pay for the help, but I promice that
whatever it is will be a lot less than when you try to do it
yourself, then call on someone to get you out of the mess.

Two other issues:
1) The nanny will likely get something from the IRS asking
why SHE didn't file on her income.

2) This is the person who watches your child/children.
While that shouldn't make a difference strictly from the
legal or accounting side of this issue, it is something I do
ask my clients to consider before they proceed. I'm not
suggesting you don't file the proper taxes, just consider
the ramifications of what may happen next when she finds out
what is going on. Act accordingly.

Also remember, in most states, there are both federal and
state issues here. Even if you settle with one, the other
will be back to haunt you next. Do get some assistance on
this.

Bryan

--
Bryan Kellar, EA
Oregon Tax Help, Inc. -- Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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<studioat55[at]yahoo.com> wrote:

- quote -

A good first step would be to realize that you've been
entrusting the care of your children to a thief. Also make
other arrangements, because the moment you demand an SSN,
she'll quit.

To fix the tax side, just file amended returns.

--
Phil Marti
Clarksburg, MD

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studioat55[at]yahoo.com wrote:

- quote -

Like the gypsy recipe for chicken soup: (first you steal a
chicken.....)

First you get her name, address and social security number.
Reckon you can do that?

ChEAr$,
Harlan Lunsford, EA n LA
Sun 20 Mar 2005

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"studioat55[at]yahoo.com" <studioat55[at]yahoo.com> wrote:

- quote -

1. Get an Employer ID number using Form SS-4.

2. Get her social security number by requiring her to
complete an I-9 form and inspecting the proof documents she
gives you. Be prepared to have to find a new nanny.

3. Calculate what you should have withheld in social
security and Medicare tax, and complete W-2 forms for each
year. It's unlikely you would be able to recover the tax
from her, so expect to eat it. In the future, withhold these
taxes from her pay. Note: very part-time nannies will get
taxes refunded and not get W-2's.

4. Complete Schedule H on your income tax return for each
open year (2001-2004) by amending prior year returns.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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studioat55[at]yahoo.com writes:

- quote -

While I respect your desire to "come clean" and make up for
your past crimes (and yes, what you did IS a crime), there's
a big problem with what you're trying to do -- you can't do
it without drawing the IRS' attention to your *nanny's*
illegal behavior. Perhaps you're willing to pay the payroll
tax, interest and penalties from the previous years, but are
you willing to cause the IRS to go after your nanny and make
her pay them as well? This does not seem fair, considering
that you agreed with her each year to pay her under the
table as she requested.

If you're willing to do that, then what you need to do is
find yourself a good accountant who will work with you to
recalculate your taxes for the previous years and then work
with you and the IRS to come to a reasonable agreement about
how much you will have to pay in interest and penalties to
clear your record.

If you're not willing to do that, then I'd suggest that you
tell your nanny that starting this year you're going to pay
her on the books, leave the prior years alone, and just hope
that the IRS doesn't decide to come after you about them.

It seems likely to me that your nanny will ask for a raise
to compensate her for your change of heart, the simple
effect of which is that she'll have to report and pay taxes
on her wages and hence her take-home pay will go down.

Incidentally, remember that the shoe could just as easily be
on the other foot.... If your nanny suddenly gets a fit of
guilty conscience and decides to come clean to the IRS,
they'll come after you.

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I have been paying my Nanny off the books for years. Each
year we discuss the tax issue and she has told me she
prefers to be paid in cash and off the books.

I would prefer to file the proper taxes. What do I need to
do to correct for all the years I didn't pay? How can I
clean up this mess?

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