Category Archives: Trust Fund Recovery

Immigrant Tax Alert – Tax Scam Targets Immigrants

Blog By: Coleman Jackson, PC

Immigration & Tax Law Firm

Firm Site www.cjacksonlaw.com

 

October 31, 2013

Today the Internal Revenue Service (IRS) warned of an insidious, sophisticated telephone tax scam targeting consumers (immigrants and recent arrivals to the United States may be particularly besieged), throughout the United States.  The IRS described the fraudulent activities in Issue Number:  IR-2013-84 as follows:

“Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.”

The IRS further described the current tax scam as follows:

“Other characteristics of this scam include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.

After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.”

Immigrants are particularly vulnerable.  They are in a new land and may be very unfamiliar with the tax laws, tax collection practices and taxing policies of the federal, state and local government.  They may not even be familiar with all of the various taxing authorities.  Immigrants must be especially vigilant and on the alert for tax scams.  But they also must be aware that, in the United States, there are various governmental units who might be charged with assessing and collecting various types of legitimate taxes.  Every communication that may be received concerning a tax issue is not a scam.

Taxing authorities do not ask for personal information such as social security numbers, banking account information and other personal data over the phone, through social media or via tech messaging  or instant messaging or through electronic mail to taxpayers.   If you receive communications through these media you should immediately be on high tax alert.  It would be very unusual for either the federal, state or local government to ask for personal confidential information through these media.  Government correspondence will typically be mailed to you using the United States Postal Service.    The mail will typically be sent to your last known residential address or business address.  If the mail is received anywhere else or otherwise looks suspicious, be on high tax alert.  If you receive information requests through these types of media or other suspicious circumstances, you should be extremely careful.  Consider these guidelines:

DON’TS:

  1. Never give out personal information, such as, your social security number, or bank account details in response to telephone request, emails, texts or social media requests;
  2. Never agree to meet with the caller in person at the instruction of the caller;
  3. Never pay an alleged tax debt with cash at the instruction of the caller;
  4. Never wire transfer any money to the caller or by instruction of the caller;
  5. Never turn over anything else of value to the caller or anyone else as instructed by the caller;

DO’S:

  1. Contact  directly the federal, state or local governmental authorities and report the incident-
    1. Federal Tax Issues—call the IRS at 1-800-829-1040 or Treasury Inspector General for Tax Administration at 1-800-366-4484;
    2. State Tax Issues—  in Texas, call the Texas Comptroller’s Office at  1-800-252-5555 (Sales & Use Tax Issues) or 1-800-252-1381 for (Franchise Tax Issues);
    3. Local Tax Issues— call your city or county tax collector; in Dallas County call 1-214-653-7811.  Call the county tax office where you reside with any questions regarding local tax issues, such as, property taxes.

If you are still confused after contacting the federal, state or local governmental authorities or you just don’t know what to do, contact a tax attorney.  You might also be able to get some guidance from local non-profit organizations, churches and other institutions.  Some area law schools may have tax clinics available for immigrant taxpayers.

Bottom line, as an immigrant taxpayer in America, you do not have to suffer tax harassment in silence or under individual or community siege.  Reach out as we have outlined above to seek help when you suspect that you, your family or community are victims of tax scams.

This blog is written to inform and for educational purposes only.  It is not given as legal advice and does not create an attorney client relationship.  You should consult an attorney for any particular matter pertaining to your facts and circumstances.

COLEMAN JACKSON, P.C.

Immigration & Tax Law Firm

6060 North Central Expressway, Suite 443

Dallas, Texas 75206

Office Phone:  (214) 599-0431 (English)   (214) 599-0432 (Spanish)

Employee or Independent Contractor- Why does it Matter?

Employee or Independent Contractor

Why Does Classification of Workers Matter?

Blog Written By:  Coleman Jackson, Esq. | www.cjacksonlaw.com | 214-599-0431 and Spanish 214-599-0432.

July 18, 2013

How should you make a determination?

How does the Internal Revenue Service make a determination?

Typically when Internal Revenue Service auditors examine a business for the purpose of determining worker classification, the Service will generally follow the United States Supreme Court’s 1947 decision in a case called, United States vs. Silk.

In the Silk case, the Court said that whether a worker is properly classified as an employee or independent contractor turns on all the facts and circumstances. The Court delineated 20 factors, which if a majority of the factors can be answered yes, then the Internal Revenue Service is more likely than not, will classify the worker as an employee. These 20 factors are as follows:

  1. Is the worker required to comply with instructions about when, where, and how the work is to be done?
  2. Is the worker provided training that would enable them to perform the job in a particular way?
  3. Must the worker perform the services personally?
  4. Is there a continuing relationship between the worker and the entity that hired the worker?
  5. Are the services provided by the worker an integral part of the business’ operations?
  6. Does the entity hire, supervise or pay assistants to help the worker on the job?
  7. Does the recipient of the worker’s services set the work schedules?
  8. Is the worker required to devote his or her full time to the person for whom he or she performs services?
  9. Is the services performed at the place of business of the entity or at specific places designated by the business?
  10. Does the recipient of the services direct the sequence in which the work must be done?
  11. Is the method of payment hourly, weekly or monthly as opposed to commission or by the job?
  12. Are business and/or traveling expenses reimbursed by the business to the worker?
  13. Are regular oral or written reports required to be submitted by the worker?
  14. Does the company furnish computers, work tools and supplies used by the worker?
  15. Has the worker failed to invest in equipment or facilities used to provide services?
  16. Does the arrangement put the worker in the position of realizing either a loss or profit on the work?
  17. Does the worker perform services exclusively for the entity rather than working for various other entities at the same time?
  18. Does the worker make the worker’s services available to the general public?
  19. Is the worker subject to dismissal for reasons other than nonperformance of contract specifications?
  20. Can the worker terminate the relationship without incurring a liability for failure to complete the assigned job?

Why does it matter how a worker is classified?

  1. The cost for misclassification of workers can be tremendous.
  2. First and foremost your employees could be erroneously carrying the burden of self-employment taxes.
  3. Misclassification of your workers means that you (the employer) are not paying your fair share of taxes and that may subject you to back taxes, interest and penalties. The Service wants the taxes to be paid by the proper party.  Noncompliant entities could be eligible for certain safe-harbor provisions of the Internal Revenue Code.
  4.  There are also certain State of Texas consequences for failing to properly classify workers.  Therefore proper classification of workers is both a federal and state tax law issue.  There could be civil and criminal consequences for failing to properly classify workers in the State of Texas.
  5.  It is important that immigrants pay their fair share of taxes.  It is also fair for immigrants to be properly classified as employees or independent contracts depending upon all the facts and circumstances.

Why Risk Being Caught – Act Now!

If you are a worker and don’t know how you should be classified, you should contact a tax attorney to discuss all the facts and circumstances of your particular situation because we only discuss general principals in this blog.

If you are an employer and want to do the right thing and avoid possible huge consequences in the future for misclassification of your workers, get legal representation to review your situation today.

COLEMAN JACKSON, P.C.

Professional Legal Services Corporation
Immigration & Tax Law Firm

6060 North Central Expressway
Suite 443
Dallas, Texas 75206.
Office Phone:  (214) 599-0431 | Email:  cj@cjacksonlaw.com | Firm Site:  www.cjacksonlaw.com