paid under the table then rec'd 1099

[helphelp1]

I have a question...my 20 yr old cousin worked for a contractor last year "off the books" so to speak. Actually he was being ran through a temp agency for awhile and then they both supposedly agreed to treat him like a sub-contractor even though he didn't have a license. My cousin received a 10-99 for $20,000 for 2006, however, he also received a 10-99 for part of 2005 (but he is young and didn't do his taxes that year). He had to pay over $7000 in taxes this year!!! Do you think he has a case to sue that contractor for taking advantage of him? He tried to send him a certified letter saying he wants him to pay part of his taxes, but the guy wouldn't accept the letter. Any response would be very much appreciated!

 

[Michael Wechsler]

I have a question...my 20 yr old cousin worked for a contractor last year "off the books" so to speak. Actually he was being ran through a temp agency for awhile and then they both supposedly agreed to treat him like a sub-contractor even though he didn't have a license. My cousin received a 10-99 for $20,000 for 2006, however, he also received a 10-99 for part of 2005 (but he is young and didn't do his taxes that year). He had to pay over $7000 in taxes this year!!! Do you think he has a case to sue that contractor for taking advantage of him? He tried to send him a certified letter saying he wants him to pay part of his taxes, but the guy wouldn't accept the letter. Any response would be very much appreciated!

Here are my thoughts which are by no means necessarily the "right" answer. As much as I would love to hand it to the contractor, you cannot sue the contractor because under law your cousin was required to pay taxes. An "under the table off the books" agreement is actually avoiding tax requirements - isn't it? I don't think you could sue based upon that argument. There are circumstances where one party agrees to pay the taxes from a certain transaction although it's hard to say that's the case here.

If this contractor didn't "honor" his part of the bargain, perhaps telling him you're going to discuss this agreement with the IRS might return the favor, lol. :nuts