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Author: FBCinvestor Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: More fun with 1099s Date: 2/6/2003 7:15 PM
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Chmelkova2 wrote:

Thanks for your reply, David and others. She 'thinks' that I am a contractor because she doesn't want to 'deal with' Fed withholding, Social Security, etc. She is an S Corp. It's a retail store that sells craft supplies. I worked at the store during her open hours, doing floor sales, running the cash register, helping customers with their projects, etc. I no longer work there, so aside from calling the authorities, it sounds like my option is to suck it up and pay the tax, huh?

Just because she 'thinks' you are a contractor does not mean you qualify as a contractor under IRS rules. This is one of the biggest areas of tax fraud (even unintentional) and the IRS could assess penalties in an audit.

When I worked as a contractor, I used my own equipment at my own location, and set my own hours. My work became the property of the other company because that is what we agreed to in the contract.

I do know that the rules for S corporations differ in many areas from the rules the rest of us must follow. This may be a case where you need to consult a tax professional. If she is wrong and you were in fact an employee, going along with it may make you an accomplice if any legal action results.

FBC Investor
DISCLAIMER: I am neither a tax accountant nor an attorney, so take my advice with a grain of salt.


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