Independent Contractors

[Goddyssey]

Are you treated as a business i.e. paying taxes after expenses? If yes, are all business expenses applicable, or are there restrictions that apply to independent contractors? Thanks!

[Nefertari]

Independent contractors pay there own taxes, taxes are not withheld from their pay.  There are some specifics to claiming some expenses on your tax return, for instance a home office or work computer its sole usage must be for your business.

[Djehuty-M]

Are you treated as a business i.e. paying taxes after expenses? If yes, are all business expenses applicable, or are there restrictions that apply to independent contractors? Thanks!

Independent contractors are not treated as EMPLOYEES! They are not treated as a business as long as they are not dba'd. However, they must file individual tax returns and possibly a Schedule C (if they are doing business as a sole proprietorship) if they are already and/or currently participating in the income tax system.

[Minister8-Ball]

Usually, you will receive a 1099 form from the entity that contracted you, especially if the work you did was over $600 in cost. Your legal structure will also determine how much you have to pay (FICA, etc.). I would sit with a tax accountant to know what your rights and responsibilities are as an independent contractor. Also, check with your state's department of labor to learn how it defines "independent contractor".

[spielz]

In a Made-up scenario. A company purchases 20,000 worth of services via consultations. This company will send a 1099 at the end of the year to the consulting company, who just so happens to set up the company with their  locality giving notice to all of this business
( no business license).

Can the tax authority legally move against this company? Is the 1099 sent to taxing authority?
Can the taxing authority lay a tax on this company?

[Djehuty-M]

In a Made-up scenario. A company purchases 20,000 worth of services via consultations. This company will send a 1099 at the end of the year to the consulting company, who just so happens to set up the company with their  locality giving notice to all of this business
( no business license).

Can the tax authority legally move against this company? Is the 1099 sent to taxing authority?
Can the taxing authority lay a tax on this company?

Can the tax authority legally move against this company? ANSWER: Yes! An IRS Form 1099 was submitted saying someone received or earned income. The 1099 notifies the taxing agency.

Is the 1099 sent to taxing authority? ANSWER: It certainly is!

Can the taxing authority lay a tax on this company? ANSWER: It certainly can and will. Income has been reported!

[spielz]

Can the tax authority legally move against this company? ANSWER: Yes! An IRS Form 1099 was submitted saying someone received or earned income. The 1099 notifies the taxing agency.

Thou they are notified an investigate is the only thing which should take place. Legally moving against is would require several elements
which is fatal to the charge/complaint ( usually evasion).

Let's start with tax evasion, there are three essential elements to this charge namely,

1Willfulness;
2. Existence of a tax deficiency;
3. an affirmative act constituting an evasion or attempted evasion of the tax.

Source ;
Statesv. Dack, 747 F.2d 1172, at 1174 (7th Cir, 1984), United States v. Bishop, 264 F.3d 535 (5th Cir. 2001),  United States v. Mal, 942 F. 2d 682, at 687 (9th Cir. 1991)

Is the 1099 sent to taxing authority? ANSWER: It certainly is!

It will definitely start an administrative investigation, if responded to correctly will show intent to follow the law per case law contained within that response. Anything is possible but to move forward absent signed tax form, proof respondent is u.s citizen, tax deficiency, willfulness and so on.........Really makes their case hard to win.

Can the taxing authority lay a tax on this company? ANSWER: It certainly can and will. Income has been reported!
The signed tax form really is what is needed because my thought is the 1099 does not list income It list compensation. Since income is gain or profit "Reasonable compensation for labor or services rendered is not profit" Lauderdale Cemetary Ass'n v. Matthews, Atlantic 2nd 280,  There is a clear distinction between "profit" and "wages", or compensation for labor. Compensation for labor (wages) cannot be regarded as profit within the meaning of the law.....Oliver v. Halstead (1955) 86 S.E. Rep. 2d 859.

Along with info mentioned supra this person is not exercising any corporate privilege, he does not work or reside within the federal jurisdiction nor is he engaged in any occupation requiring a license from the federal government. "the supreme Court held that the federal government could not tax activities that were under the sole and exclusive realm of the state" Bailey v. Drexel Furniture Co. 259 U.S. 20 (1922)

It is well settled that the taxing authority has and will move on subjects with or without legal justification.
Make no mistake "Legally" they can not and they do what they want

What do you all think?

[Djehuty-M]

Bruh, you're on the money! This country no longer goes by its own laws. Well, if the citizen benefits from the law, then government ignores the law in 95% of cases. There are a few small exceptions.

[spielz]

hit me via PM.

[spielz]

hit me via PM.
[/quote

Here is one of those exceptions.  ( didnt hurt he is in the fraternity (32 degree) also.)

http://www.google.com/url?sa=t&source=web&cd=2&sqi=2&ved=0CBYQFjAB&url=http%3A%2F%2Fwww.wethepeoplefoundation.org%2FMISC%2FCryer%2FCRYER--MotiontoDismiss.pdf&rct=j&q=tom%20cryer%20defense%20motion&ei=M_2UTOOID4H78AaS4ZSSDA&usg=AFQjCNEVXuNrb2M_VdnynbZPr_H9meZORQ&cad=rja