My friend owns a business that employs 1099 contractors. He\u2019s never once filed taxes personally or on the business. He gives his contractors a 1099 but he never files them with the IRS on his end

2020-03-31 11:56发布

2楼-- · 2020-03-31 12:03

The IRS spends little time with unfiled 1099s. Eventually, they may figure it out from analyzing those contractors that file their own returns with his 1099s.

Not filing his business and personal returns will be more serious. Failure to file penalties are serious and big. Someday, the IRS will figure out his unreported income and investigate.

He's taking advantage of a woefully underfunded IRS and our system of voluntary income tax filings.

You may say, well, the IRS should know his income and expenses. The IRS doesnt know all the “goings on" of 330 Million people and say 30 million businesses. You should be far more worried about a Big Brother state if they did.

3楼-- · 2020-03-31 12:03

Assuming your friend is making a profit, he is a tax cheat who is stealing from you and all other tax paying Americans. Report him to the IRS.

What he is doing is morally repugnant. It's people like him that makes it more expensive for everyone else. It's no different than shoplifting, with the addition of extreme unpatriotic behavior.

Bad things happen not because of bad people but because of good people doing nothing about it. Don't be one of those people.

4楼-- · 2020-03-31 12:03

And he's probably paying people as contractors when they are actually employees. He would owe state employment taxes as well. Tax evasion is a crime. Fines and prison. One upset customer or worker and watch out. Someone gets hurt? Watch out! Law suit probably cuz that's how it goes.

5楼-- · 2020-03-31 12:03

Pure, dumb luck.

One of these days, though, he’ll get the letter. Guaranteed. Or maybe even a knock on the door if they decide to go criminal (which wouldn’t be hard at all). Then he’ll realize how lucky he’s been.

6楼-- · 2020-03-31 12:05

If someone is does not file personal taxes even though they have an obligation to do so, they are courting serious legal penalties. On the other hand, you do not say whether this individual actually has a filing obligation…

As for the business-and-sub-contractors, the EIN number on a 1099 is entered as part of the contractor’s tax return and is cross-checked against other documentation. If the EIN is invalid, it can trigger the rejection of a tax return which may, eventually, lead back to your friend’s failure to complete his obligations as an employer. If the EIN is valid, other checks may fail at a later point and raise questions.

In any event, things are likely to catch up with him sooner or later unless this is a very small-time operation - and it’s not likely to be pretty when it does.

7楼-- · 2020-03-31 12:05

I’m not sure how you know that your friend furnishes Form 1099 to his contractors but doesn’t file them with IRS. Also, I’m not sure how you know that your friend doesn’t file his personal or business tax returns.

Having said this, your friend is in violation of the income tax laws in the United States. Getting away with these violations will likely be short-lived. If it is happening, it’s because IRS is short-staffed and hasn’t gotten to work on getting him into compliance.

Your friend may get himself into “deep doo doo” if/when he is caught. The tax owed, the penalties, and the interest will be a gigantic burden. He could possibly be criminally prosecuted.