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The 1099 versus W-2 gambit is dangerous. He could, in principle, claw back the entirety of the 1099 payments, including whatever you paid on as taxes, then adj

The 1099 versus W-2 gambit is dangerous. He could, in principle, claw back the entirety of the 1099 payments, including whatever you paid on as taxes, then adjust them to a W-2 and pay you back less W-2 taxes. You'd then have to wait until the next tax cycle to get a government refund on the 1099 taxes. Retroactive reclassification of money is a dangerous game unless you have big cash reserves and lawyers of steel. The IP gambit is potentially career ending. All he has to do is take out a press release that insinuates you may have destroyed his business with lawyers out of purest spite. That press release will hang around on background checks forever. If you need leverage, go after unemployment insurance. If you were watching the clock, then he should have been paying unemployment insurance on your behalf. The state unemployment bureaucrats are remarkably bitchy and tenacious about it, but the worst case expenses to the company are not enough to start a legal war over. They are, however, enough to get the attention of a paranoid tightwad.

lkrubner 16y ago
Actually, the IRS has been cracking down on 1099 abuse. So, he doesn't necessarily need to get a lawyer, he could possibly just notify the IRS and let them come in with lawyers. I agree with you that using the law is always a bit of a gamble. But the mere threat of calling in the IRS might be useful.
- Daniel_Newby 16y ago
  The IRS has not exactly been cracking down on abuse. A lot of the 1099 stuff has been double taxation: contractor/employee gets paid on 1099, they properly pay all taxes including self-employment, then the IRS reclassifies them as W-2 and collects a second round of taxes and fines from the contractee/employer. Basically the IRS considers the employer guilty unless they can track down the contractor/employee and extract paperwork from them, even though the IRS already possesses the documents that conclusively prove innocence. I'm actually mildly impressed nobody has truck bombed them yet. Crazy as he was, the airplane dude had a point. The lesson for contractees is that you pay estimated taxes for your 1099 contractors. If they have deductible expenses, they can take it up with the IRS on April 15.

lkrubner 16y ago

Actually, the IRS has been cracking down on 1099 abuse. So, he doesn't necessarily need to get a lawyer, he could possibly just notify the IRS and let them come in with lawyers. I agree with you that using the law is always a bit of a gamble. But the mere threat of calling in the IRS might be useful.

Daniel_Newby 16y ago
The IRS has not exactly been cracking down on abuse. A lot of the 1099 stuff has been double taxation: contractor/employee gets paid on 1099, they properly pay all taxes including self-employment, then the IRS reclassifies them as W-2 and collects a second round of taxes and fines from the contractee/employer. Basically the IRS considers the employer guilty unless they can track down the contractor/employee and extract paperwork from them, even though the IRS already possesses the documents that conclusively prove innocence. I'm actually mildly impressed nobody has truck bombed them yet. Crazy as he was, the airplane dude had a point. The lesson for contractees is that you pay estimated taxes for your 1099 contractors. If they have deductible expenses, they can take it up with the IRS on April 15.