Cheated by California based company in the end of 2009 ?
Thread poster: Geraldine Oudin

Geraldine Oudin  Identity Verified
United Kingdom
Japanese to French
+ ...
Oct 10, 2010

Dear all,

An agency based in Thousand Oaks, California, has provided me with a lot of work in 2009. It is a company that contacted me via Proz.
They have always payed in time...until the fall. They claim that the client is not paying them, and I would tend to believe them because they keep on sending me regular apologetic emails.
In their last email however, they have disclosed the direct client's contact information and asked for my advice in how to recover the money from him (?).
I am just interested in finding out how many people this agency is owing money to. If you think the same company might be owing money to you, contact me by PM.



[Modifié le 2010-10-11 01:06 GMT]


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Teresa Borges
Portugal
Local time: 17:51
Member (2007)
English to Portuguese
+ ...
Payment Oct 10, 2010

The fact is that they must pay you even if they have not been paid by their customer!

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Geraldine Oudin  Identity Verified
United Kingdom
Japanese to French
+ ...
TOPIC STARTER
Of course Oct 10, 2010

Teresa Borges wrote:

The fact is that they must pay you even if they have not been paid by their customer!


Of course they do, and they acknowledge it.
I just would like to know how many other people are involved. There should be at least 5 others in the EN>FR pair.


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 13:51
English to Portuguese
+ ...
One suggestion Oct 10, 2010

Geraldine Oudin wrote:
In their last email however, they have disclosed the direct client's contact information and asked for my advice in how to recover the money from him (?).


Suggest they have a look at http://www.stevensricci.com/irs_advantage.html

I'm not saying that they should actually use it, as it involves saying goodbye to your and their hard-earned money, however considering the risk of the delinquent payer having their tax accounting scrutinized by the IRS, they'll often pay. Twice already, when I mentioned that i knew about it, I got paid in less than 48 hours.

In a nutshell, in the US unpaid debts are deemed taxable income. So if anyone blows the whistle with a 1099 form, IRS auditors will go check for any other such 'income' there on which Uncle Sam has not received his share.


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Geraldine Oudin  Identity Verified
United Kingdom
Japanese to French
+ ...
TOPIC STARTER
Thank you José Oct 10, 2010

I'll tell them.
A shame I can't use it myself as I am not based in the US...but wait...you aren't either, are you?

[Modifié le 2010-10-10 12:03 GMT]


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 13:51
English to Portuguese
+ ...
In fact... Oct 10, 2010

Geraldine Oudin wrote:
I'll tell them.
A shame I can't use it myself as I am not based in the US...but wait...you aren't either, are you?


... for it to work you have to waive your right to that money; that's what the IRS form is all about. To illustrate, if ACME owes you $1,000 and they don't pay, in the US that money is taxable income. The moment they pay you, it's not income (hence it's not taxable) any more. It makes no difference if the money went 'down under', either to you in Australia or to me in Brazil, it's no longer taxable income for ACME; it becomes taxable income for us, the payees, wherever we are.

It doesn't matter where the creditor actually is, as long as the debtor is established in the US. If you are absolutely sure that payment is not coming your way, it won't hurt acknowledging that, so you might as well let hell break loose on that client.

If the client is smart, the they'll realize that it will cost them much more after IRS auditors rummage their accounting on the chase for more instances of unpaid bills that are taxable income, and assess the taxes they should have paid already, plus possible penalties. Nobody with a sound mind will actually invite tax authorities in any country to audit their books. So, relying on them being reasonable, it should be expected from them to pay you right away, simply to stay out of trouble.


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Katalin Horváth McClure  Identity Verified
United States
Local time: 12:51
Member (2002)
English to Hungarian
+ ...
Tell the agency about the IRS deal Jose mentioned Oct 10, 2010

It did help me when a client did not seem to want to pay - they were delaying the payment forever, until I mentioned the "taxable income" and "IRS audit" phrases.
I got paid the next day.

Also, you can make a Blue Board entry once a year, and report no payment there.
So, even if you made a positive entry last year, you can enter another one now.
They will get a notification about it, and that seems to help in some cases, too.
You may have a chance other victims contacting you when they see your BB entry.

The bottom line is, it doesn't matter whether their client paid them or not. That is none of your business. They can contract with a collection agency or take whatever measures they want to recover their money, but your payment does not depend on that. They owe you the money, period.

Katalin


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Henry Hinds  Identity Verified
United States
Local time: 10:51
English to Spanish
+ ...
How's that again? Oct 11, 2010

If a business pays you, the translator, $1,000 for a business-related job, then that business is entitled to deduct the $1,000 as en expense, thus reducing its taxable income in that amount. Of course they also need to submit the 1099.

If you do a job for a business and it owes you $1,000 for a business-related job but fails to pay, then it is NOT entitled to deduct the $1,000 as en expense because it has not paid. Simple as that.

It is not "taxable income", it is merely a deduction that does not exist and thus increases taxable income, but you would have no call to be blowing any whistle with a 1099 form. The 1099 would be false, and you could get in trouble for that I think.

This guy José mentions is just trying to bamboozle people to make a quick buck. Note:
PRICE - $129.95. What he says is all hot air, and like I say, if you do a false 1099, you might end up IN TROUBLE.



[Editado a las 2010-10-11 02:22 GMT]

[Editado a las 2010-10-11 02:23 GMT]


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Aude Sylvain  Identity Verified
France
Local time: 18:51
English to French
+ ...
WPPF Yahoo list Oct 11, 2010

Geraldine Oudin wrote:
I just would like to know how many other people are involved. There should be at least 5 others in the EN>FR pair.


Hello Geraldine,

I never worked with such agency, but you might try to post their name on the WorldPaymentPracticesFree (WPPF) Yahoo list - WPPF-subscribe@yahoogroups.com
I saw a number of useful info on that list.

Bon courage !


(edited for typo)

[Edited at 2010-10-11 08:01 GMT]

[Edited at 2010-10-11 08:02 GMT]


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 13:51
English to Portuguese
+ ...
Making it very clear Oct 11, 2010

Henry Hinds wrote:
This guy José mentions is just trying to bamboozle people to make a quick buck. Note:
PRICE - $129.95. What he says is all hot air, and like I say, if you do a false 1099, you might end up IN TROUBLE.


I never had a doubt about it being that guy's ticket to a quick buck. If people are gullible enough to send billions of dollars as payment for bank fees in "Nigeria", why wouldn't they buy that domestic collection package? I only used the free information the guy put on his web site.

The basis of it makes sense. I mean, if I did a job worth $1,000 for John Doe, and he refused to pay me, it's tantamount to having done no job at all and sending him a check for $1K. If he were a charity institution, even in Brazil, not only in the USA, that would be tax-deductible to some extent. The bottom line is that he made a one-grand profit on me. That lawyer makes a convincing case that such profit is taxable income in the USA.

So I tell my defaulting client so. It's unlikely that the client would have intently declared my unpaid invoice as income on their tax return, unless it's a skilfully engineered scheme to defraud translators. If it were so, that client would already have some record as a rogue outsourcer in the translation community, viz. Proz (Blue Board) et al.

Given that information, the client assesses the situation. The retainer to hire a lawyer in the US to do it (assess the situation) for them would cost several times what is usually owed to a translator in such cases. The risky consequences of anyone having their tax accounting scrutinized is high: no matter how careful and honest they may have been, there would always be a chance for some detail having been overlooked.

Considering US history, Al Capone served time for income tax evasion, and not any other charge. So people tend to think that the cheapest and safest way out is not to mess with the IRS, and just pay that translator pronto.

As long as I don't send a 1099 form, the risk is on the client's side. I'm not advising anyone to do it, this should be made very clear. I'm just saying that it has paid off for me twice so far to inform the client that the risk is on their side.


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LEXpert  Identity Verified
United States
Local time: 11:51
Member (2008)
Croatian to English
+ ...
Perhaps indeed taxable income Oct 12, 2010

Henry Hinds wrote:

It is not "taxable income", it is merely a deduction that does not exist and thus increases taxable income, but you would have no call to be blowing any whistle with a 1099 form. The 1099 would be false, and you could get in trouble for that I think.



There are other situations where such "I should have paid this but didn't" gains are treated as taxable income. For example, a relative gives me a below-market mortgage. The difference in what I would have paid at market rates and what I am paying is actually treated as taxable income, and not simply a forgone mortgage interest deduction (for the higher amount I am not paying). That might well be the situation here also.

In general, there is a disappointing and unfair disparity in the tax treatment of inputs into goods and inputs into services. If somebody breaks into my warehouse and steals my inventory, I can take a casualty loss for the cost of goods sold. However, if somebody - essentially - steals my services by contracting for work that he (presumably) does not intend to pay for, I am not entitled to any deduction to offset my labor. Basically, in this situation, my time has no value at all.


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Geraldine Oudin  Identity Verified
United Kingdom
Japanese to French
+ ...
TOPIC STARTER
Thank you all Oct 13, 2010

For your valuable insight.
Unfortunately mentioning the IRS has had absolutely no impact on the agency, which claims they have nothing to hide and no money tp pay and are currently engaged in a trial with the end client. Let's hope they'll get their money in the end, and I'll get mine.


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Katalin Horváth McClure  Identity Verified
United States
Local time: 12:51
Member (2002)
English to Hungarian
+ ...
Are they bankrupt? Oct 13, 2010

claims they have nothing to hide and no money to pay


Are they bankrupt?
What do they mean they have no money to pay?

Let's hope they'll get their money in the end, and I'll get mine.

Well, I think you can do more than just hope.
Have you thought about using a collection agency?
I am not sure how much money is involved, but it may be worth to actually use that route.
They owe you the money, independent of whether their client pays them or not.
They have to take it out of their profits or whatever, and pay you.
In case they are bankrupt, it is even more important to get on their "creditor list', so in case they liquidate, you have at least a chance to recover your money (or at least some of it).
Katalin


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