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Willful vs. unintentional misclassification-IRS

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  • Willful vs. unintentional misclassification-IRS

    For the past 4 years I have been working as an IC. There is no way my employer can defend this, I meet every definition of an employee. I have even discussed this with him, and he has agreed in the past to put me on payroll. I even have an email from July 2002 promising to do just that.

    From what I have read on the web over the past few days, the IRS treats willful misclassification differently from unintentional misclassification, and the penalities are different. If I understand what I have read correctly, the IRS will make him pay the whole tax owed, including my share, if they can prove that the misclassification was willful. Is this correct, and is my email correspondance enough to meet the burden of proof?

  • #2
    I don't know what the penalties are for a willful misclassification of an employee's status. I'm sure the DOL can advise you.

    Since we don't have access to your email correspondence, we can't comment on your evidence but if you have specifically told your boss that he is in violation of DOL and IRS reg's regarding your IC status, then that sounds like adequate proof to me that he's in willful violation. Your next step is to file a complaint with the DOL.

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    • #3
      Thanks for the response. I'm open to suggestion, but my instinct is to take it straight to an attorney. My boss is the kind of guy that would fight any ruling by the government and force me to pay a lawyer to collect any judgement anyway. If I'm correct, the State of CA does not provide for this unless they determine that you can't afford an attorney.

      Besides, there is more to this story. My boss also offered me an opportunity to buy into the company which he later withdrew (technically he changed the terms of the deal after I had been working there a year). I don't know if this falls into the definition of fraud or bad faith or what, but I have enough email correspondance that I want an attorney to look at it.

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      • #4
        Employees misclassified as independent contractors have legal claims for unpaid overtime and an equal amount in liquidated damages if they work over 40 hours (and are not otherwise exempt from the OT law).
        Dan Getman
        http://getmanlaw.com

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