I work from home for the same company for 3.5 years as a private contractor, even though everything points to fact that I'm an employee. I send a time sheet to Finance for an hourly wage. They totally control how and when the work is to be done and by whom. I've had the same, set part-time hours since 2011. They keep renewing the contract.
I didn't pay the self employment tax vis Turbo tax for the last 2 years, and now the IRS has written me a letter saying they've made changes to my 2012 return and that I didn't pay my SE tax.
Should I tell the IRS that I don't agree that I should pay SE tax cause I'm not a contractor and I've been misclassified by my employer?
Or should I talk to my employer about this in some way first? I doubt they're going going to pay my back SE tax for me.
You are probably not an independent contractor. It sounds like you have known this for a while, haven't paid your taxes and now the IRS wants their money, so you think your employer should pay them. It doesn't put you in a very good light. Your employer should have been paying you as an employee and should have been making all the state and federal withholdings as well as paying social security, workers compensation, etc. You can file a complaint with the Division of Industrial Relations for misclassification, in which case the employer will have to pay the back taxes, etc., You may or may not be responsible for your portion of the contributions. In some cases I have advised employer's to just pay the back taxes including the employee part to avoid the complications of collecting the employee's portion. In either case you should consult a CPA for assistance in cleaning up the mess. You could also speak with an employment attorney who could assist you in getting the matter straightened out.
You can find an attorney here on AVvo or by going to the California Employment Lawyer website CELA.org. You can also call the state bar for a referral to an attorney.
Best of luck!
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If you think you've been misclassified you should consult an employment attorney. He or she will need to interview you and go over your records before discussing your options. Most attorneys will offer a free consultation. If you have been misclassified, other matters to keep in mind include whether or not you were given appropriate rest breaks, meal periods, overtime, reimbursement for business expenses etc.
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If I understand you correctly, you have knowingly gone along with this independent contractor arrangement for 3 1/2 years, fully aware you have to pay your own taxes per the agreement with this company. Now that you have been caught not paying your taxes, you would like to put that responsibility on the company for, what you hope, will turn out to be your employer.
Based on your description, you may be right, but the employer will never acknowledge this and you are going to have to either file suit against it or initiate a government audit which is going to take time. But the IRS is not going to wait, while the penalties pile up.
You need a tax attorney to help defend you. It is possible, the attorney may recommend you find a way to pay the back taxes and then seek reimbursement from the company, if there is a judicial finding that you were misclassified. Time is of the essence, so don't delay because the longer you wait, the more this is likely going to cost you.
They say you get what you pay for, and this response is free, so take it for what it is worth. This is my opinion based on very limited information. My opinion should not be taken as legal advice. For true advice, we would require a confidential consultation where I would ask you questions and get your complete story. This is a public forum, so remember, nothing here is confidential. Nor am I your attorney. I do not know who you are and you have not hired me to provide any legal service. To do so would require us to meet and sign written retainer agreement. My responses are intended for general information only.
There are not enough facts here to tell if you are really misclassified. If you are, that is the employer's responsibility. You made a mistake by not paying the tax, and should address that with a CPA, but if you were misclassified, there may be a whole class of employees being treated as independent contractors. You should talk to an employment lawyer who is familiar with independent contractor misclassification issues, and give them all of the facts.
More facts could change the answer. This response is not legal advice.
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