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Atention: Agencies will be audited for 1099
Thread poster: sebastian lantos

sebastian lantos  Identity Verified
United States
Local time: 23:29
Member (2003)
English to Spanish
+ ...
Feb 17, 2003

I have just received notification that my state employment comm. is trying to proove that my 1099 are W2.

Although almost everything I read would not clasify them as employees, I am looking for some insight. THIS IS DANGEROUS PRECEDENT FOR AGENCIES AND FREELANCERS.


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Gillian Searl  Identity Verified
United Kingdom
Local time: 04:29
Member (2004)
German to English
What are you talking about? Feb 18, 2003

That is such a cryptic message full of codes. Please explain what you are talking about.

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Steffen Pollex  Identity Verified
Local time: 05:29
English to German
+ ...
And my 2#F*** are not 100% @"&###!!! :-) Feb 18, 2003

I feel, THIS IS DANGEROUS PRECEDENT FOR AGENCIES, FREELANCERS AND MYSELF.







What re you trying to say, actually?????



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Ralf Lemster  Identity Verified
Germany
Local time: 05:29
English to German
+ ...
Steffen... Feb 18, 2003

ROFL!!!



Ahem.



Seriously: have a look at www.proz.com/?sp=bb/viewtopic&topic_id=8267&forum_id=19





[ This Message was edited by:on2003-02-18 09:57]


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Judy Rojas  Identity Verified
Chile
Local time: 01:29
Spanish to English
+ ...
Check this site for your answer Feb 18, 2003

Here is what the IRS says at http://www.irs.gov/businesses/small/industries/article/0,,id=98140,00.html



\"Subcontractor or Employee? - Construction Tax Tips



Whether a worker is classified as an employee or an subcontractor can have important consequences under many areas of law, including federal tax laws. This tax tip is designed to give you a basic understanding of the difference between subcontractors and employees so you can discuss your situation with your tax professional.



If you hire an employee, you are responsible for withholding and paying the employment-related taxes. You issue a Form W-2 to an employee. An subcontractor is a worker who is not your employee. You give a Form 1099 to an subcontractor showing the amounts you paid him. The subcontractor is responsible for keeping his or her own records and paying his or her own income and self-employment taxes. It is important to note that either classification-employee or subcontractor-can be valid.



The difference between an employee and an subcontractor depends on your right to direct and control the worker. If you have the right to direct and control the worker, the worker will be your employee. You do not have to actually direct or control the worker for the worker to be classified as an employee, you need only have the right to direct and control the worker.



In determining whether a business has the right to direct and control the worker, the IRS considers three categories of factors:



Behavioral control,

Financial control, and

Relationship of the parties.

It is important to remember that all the facts of your situation and all the relevant factors must be examined to determine whether the worker is an employee or an subcontractor - no single fact or factor provides the answer.



IRS Opinion



If you want to get an IRS opinion on your situation, a Form SS-8 can be filled out by either the employer or the worker and sent to your local Internal Revenue Service office for a decision. The form includes all of the above questions and is designed to bring out all the facts of your situation.\"



And there is a lot more.





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Ralf Lemster  Identity Verified
Germany
Local time: 05:29
English to German
+ ...
Now I get it... Feb 18, 2003

...thanks, Ricardo.



Sounds terribly familiar - we used to have a similar problem in German (\"Scheinselbstständigkeit\" - roughly translated as \'fake self-employment\'...). Although the rules have been relaxed somewhat, it\'s still important to watch out for traps...


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