Business partner paying illegals


J

john.bery

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?


Thanks
 
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H

Harlan Lunsford

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?
If this business is a true partnership, then you've got more than one
problem, and best seek advice of an attorney.

On second thought, even if it is a corporation, e.g. a subchapter S
corporation, you've still got a problem which should be resolved post haste.

ChEAr$,
Harlan Lunsford, EA n LA
 
P

Paul Thomas

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?


Why would you do that?

Surely you should have contracted or hired legal workers, and either issued
1099's or W-2's. But lacking that, I see no reason to add to the wrongs by
issuing a 1099 to someone who didn't get paid that money.
 
W

William Brenner

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?


Thanks
A cynic might wonder if you would be as concerned had he paid
them in cash.
 
B

Benjamin Yazersky CPA

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?


Thanks


First of all, they probably don't even have social security numbers.
Thats going to be a problem.

Secondly, they are more likely to be considered employees, for whom you
should issue W2's.

Then you've got Federal & state payroll taxes to deal with.






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-----> real address on hobokeni or hobokenx <-----





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K

kastnna

My business partner was paying illegals (day labor workers) with
checks. I'm wondering if I can 1099 him for those payments?
Are you asking because you didn't know they were illegals and your
partner has endangered your business OR are you asking because you
knew from the beginning they were illegal, but didn't realize that
your partner was leaving a papertrail and now you are trying to
distance yourself from the mess?

Tax-wise, the end result is the same, you can't 1099 your partner.
Legal-wise you need to see a lawyer regardless of the answer to my
above question.
 
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J

john.bery

Are you asking because you didn't know they were illegals and your
partner has endangered your business OR are you asking because you
knew from the beginning they were illegal, but didn't realize that
your partner was leaving a papertrail and now you are trying to
distance yourself from the mess?

Tax-wise, the end result is the same, you can't 1099 your partner.
Legal-wise you need to see a lawyer regardless of the answer to my
above question.
Any more help with this? I did not know about it and only he
profitted
from it. His name (signature) is on the checks.

Also, I'm sure they were illegal, but I have their names and
address's. I've
also been told I can send them 1099s with all the information I have
on them. They were all fired as soon as I found out and this was last
Oct. I believe the law change on how illegals are treated changed in
Oct.


Thanks.
 
P

Phil Marti

Any more help with this? I did not know about it and only he
profitted
from it. His name (signature) is on the checks.
You're not making any sense. If you weren't involved in it then, and it
wasn't an activity of your partnership, why are you invovled now?
Also, I'm sure they were illegal, but I have their names and
address's. I've
also been told I can send them 1099s with all the information I have
on them.
As has been noted by several people, these are the only 1099's to be issued.
Whether they should be issued by the partnership or by your partner as part
of a side business beats me. The facts are too vague.
They were all fired as soon as I found out and this was last
Oct. I believe the law change on how illegals are treated changed in
Oct.
Well, now it sounds like it was your business. Regardless, nothing in
pertinent tax law takes note of the worker's immigration status. If you're
concerned that ICE is going to come haul you away, talk to a lawyer.

Issue the 1099's with the information you have and be done with it.
 
K

kastnna

Any more help with this? I did not know about it and only he
profitted
from it. His name (signature) is on the checks.
Sorry for being thickheaded, but I am still confused. I understand
that you did not know about it, but if it was conducted as a business
activity of the partnership, you will still likely be equally
responsible. It is very common for a partnership to have a member that
is not active in day-to-day management (which seems to be your case).
However, you entrusted your reputation and business responsibilities
to your partner in doing so. Ignorance is not a valid legal defense.

How did "only he profit"? Were the illegals paid less than minimum
wage? Were they paid from company funds? Do the two of you share in
profits from the business? Would the company have spent MORE if they
hired legal workers? It seems unlikely that you did not profit in some
way (otherwise why hire illegals). Even if the only result is that the
business has lower personnely expenses, the business now looks more
valuable to a potential buyer.
Also, I'm sure they were illegal, but I have their names and
address's. I've
also been told I can send them 1099s with all the information I have
on them. They were all fired as soon as I found out and this was last
Oct. I believe the law change on how illegals are treated changed in
Oct.
I commend you for trying to do the right thing, but a court may see
your actions as admission that you were/are an active, decision-making
partner in the business and therefore culpable.

YOU NEED A LAWYER.

Good Luck.
 
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K

kastnna

One last thought...

The issuing of the 1099's (with which you seem to be focused) is only
a small part of your problem.

Section 8 of USC 1324 stipulates that EMPLOYING illegal aliens is a
criminal act. That particular law doesn't care about any other aspect
of employment. You can properly issue 1099's until you're blue in the
face and your company has still violated that section of the code.

My boss used to say, "If you ever get mugged, don't worry about the
guy with the bat, worry about the guy beside him with the gun." IOW,
you have bigger problems than 1099s.


-IANAL
 

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