Turn employer in??

[Denne]

I just had a call from a tax client, with lots of questions and information. During tax season we had a difficult time getting any information from your employer or the insurance company regarding her pay for taking care of a woman that requires care or at least someone to be there. Here is what I know so far and need to know which direction to send her.

She started this job as a live in with free rent and a small salary to take care of the gal.

A few months after she moved in the gal started charging her rent. My client made her sign a statement as to how much rent she was paying at that point.

She never received the pay she was supposed to...even though she was paying more in rent that what she received from her employer.

The employer was supposed to pay her $2600 for the period she was there but only paid her $1100 and said to claim the $2600 on her taxes...still has not been paid what is owed to her.

The employer did not give her a W-2 or a 1099 and neither did the insurance company that is paying the employer for this care. She tried getting something directly from the Insurance Company herself....no luck.

While staying in this home she overheard several conversations that lead her to believe the employer is scamming with other businesses she owns.

My client's questions are....

Should she turn her in to the IRS for income tax evasion and get a fee for doing so?.....Advised by her police officer brother....not me ;~)

Should she turn her in to Wage and Hour to see if they can get her pay and risk more stalking by the employer? The past employer has been stalking her by phone for months. My client said right after she thinks the employer realized she had overheard some phone and personal conversations that would incriminate her. She was basically evicted out ot the rented area of the residence, about the time she started asking questions..... My client has also talked to other employees working at the house and horse farm. No one ever gets tax forms and from what she could gather no one files taxes either, since they don't get tax documents of any sort and one said she didn't know how to file without anything to file with.

What direction would you send her and what do you think she can expect?

Sorry this is so long....lots going on with this one!!

Thanks..............as always for all of your great advise~~~

[jainen]

>>Should she turn her in to the IRS for income tax evasion and get a fee for doing so?<<

No. Too much trouble for the unlikely benefit.

>>Should she turn her in to Wage and Hour to see if they can get her pay<<

Yes. Hardly any trouble at all and a good chance of (eventual) success.

>>risk more stalking by the employer<<

That's a criminal matter. Let her brother advise, not you.

[JohnH]

She should pay taxes on the income she actually received and find another employer.

[kcjenkins]

I agree with both Jainen and John, she should go to wage and hour but she should only file and pay tax on the amount she was actually paid. If she eventually does get the other amount, that will be the year she pays tax on it. And she should insist on a W-2, not a 1099, so that the employer pays the payroll taxes. Law says that they have to pay it all, whether they withheld the employee portion or not. Only fair, given the delay, that they get stuck with both halves, IMHO.