Dear Gentlemen,
In the article titled, “IRS to Pay
Back-refunds to Illegal Immigrants Who Didn’t Pay Taxes” by The Washington
Times, raised a red flag to me. As a CPA, I try to look out for my clients
so that they do not get in any trouble, but the quote below opened my mind to a
problem that is coming.
The article stated, “Under the new
program, if you get a Social Security number and you work, you’ll be eligible
to apply for the Earned Income Tax Credit,” Mr. Koskinen said.
He said that would apply even “if
you did not file” taxes, as long as the illegal immigrant could “demonstrate
having worked off-the-books during those years.”
This might make you mad that the
illegals get a refund. However, read the statement, “…could demonstrate having
worked off-the-books…” If the illegals show they worked off the books, the full
wrath of the IRS will be coming upon the businesses or people who paid the
illegals and did NOT withhold or match payroll taxes.
The amnesty is to the illegals not
the businesses that paid them. The “Trust Fund Penalty” for not paying Social
Security Tax and Medicare Tax is severe. The employer will be responsible for
the employer and employee portions of the tax and penalties equal to 100% of
the tax. If we do the math, let’s say you had a person, illegal, being paid
$500 per week and he worked for 50 weeks. That would make his pay $25,000 per
year. The tax you would have paid, if you had paid him legally, would have been
($25,000 * 7.65%) or $1,912.50. Now you will pay your portion, his portion and
a penalty equal to both portions or $7,650.00 (1,912.50 (your tax) + 1,912.50
(their tax) + 3,825.00 (penalty)). Remember the statement at the bottom of your
tax return, where you sign it; it starts out “Under penalty of perjury…” By
signing your personal and/or business tax forms, if you paid illegal workers
off-the-books, you also have committed perjury. Also, if the tax owed is
substantial, you have committed FRAUD. FRAUD=Jail!
Be careful; the amnesty program is
another program to go after businesses that did not withhold and pay what was
legally required of them. If you have paid illegal people off-the-books,
consult with a tax attorney, CPA, or other competent financial consultant.
There is one more problem; if the
bookkeeper paid the EFTPS (federal withholding, Social Security Tax, and
Medicare Tax) online and knows you were paying people off-the-books, the IRS
will come after that person if the business did not pay the taxes and the owner
is unable to pay the taxes. If the bookkeeper knows more secrets about you, you
had better watch out! They can cut a deal. The IRS will chain your doors and
run you out of business. I have seen it done.
Please understand; I am a CPA. If I
were a plumber, I am conservative enough to wear suspenders and a belt. I am
not trying to cause anxiety in anyone, but I am reading between the lines. We
all have a responsibility to pay to Caesar what is Caesar’s and to pay to God
what is His. My job is to keep you legally from paying any more than you have
to. Paying people off-the-books is trouble brewing.
Respectfully, – JEH
From the Survival Blog
Poster’s comments:
1)
Where do people think this money
comes from?
2)
It usually comes from the taxes we
the people pay to our Federal Government. It also comes from money our Federal Government has to borrow when the taxes are inadequate to pay the bills.
3)
There is something wrong with this
picture to me.
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