Ethical/logistical dilemma

wisteria
Thu, 03 Aug 2006 12:31:14 +0000

Back to the OP, here is some helpful information from the IRS FAQ page at http://www.irs.gov/faqs/faq-kw133.html:



1.16 IRS Procedures: W–4 - Allowances, Excess FICA, Students, Withholding

What can be done if an employer will not withhold income taxes, social security, and Medicare from my pay?

Generally, in situations such as this, the employer is not considering you to be an employee. Rather, you are being treated as an independent contractor (self-employed person). If you cannot resolve this matter with your employer, and if you feel that an employer-employee relationship exists, you should submit a Form SS-8 (PDF), Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding. The factors used to determine if an employer-employee relationship exists are covered in Chapter 2 of Publication 15-A (PDF), Employer’s Supplemental Tax Guide.

If your status as an employee is not at issue, it may be that you are in a category of employment whose earnings are not defined as wages under U.S. federal tax and social security law. Find out from your employer the reason that social security and Medicare taxes and income taxes are not being withheld from your pay. If you have further questions, contact the IRS at 800-829-1040 or visit an IRS walk-in office for assistance.



Note that the IRS suggest that the first line of approach should be to talk to your employer and reach a mutual understanding. Also note that the approach described above is very non-judgmental and non-accusatory–it’s simply a matter of “You and your employer need to get the facts sorted out correctly and, if necessary, we are willing to help sort them out.”

Form SS-8 mentioned above is here:

http://www.irs.gov/pub/irs-pdf/fss8.pdf

Looking through SS-8 gives you some idea as to the factors the IRS considers to decide whether a given person is an employee or self-employed.