5 ms·

I would suspect you would not be considered an employee but a contractor. I am not sure how they much they're required to report about their vendors.

swatcoder 4y ago
In the US and comparable jurisdictions, the concept of employee and contractor are not interchangeable and imply differences in things like autonomy and expectations. This is as much to make sure that workers have appropriate protections and that contractors have appropriate freedom as it is about tax reporting or whatever. Far more likely is that these companies aren't well-footed legally and don't realize that they'll only be able to stay under the radar while small. Which is common, but puts a cap on how high-profile they can grow. They'll need to sort things out before they can scale or get involved in regulated industries.
- jokethrowaway 4y ago
  It's highly debatable and jurisdiction dependant. Plenty of contractors are basically employees paying less taxes and not having holidays. (not that I'm complaining, I'm glad there is a legal way to minimise how much the government steals from me) States are a bit trickier because healthcare is so ridiculously overpriced and therefore people value health insurance provided by an employer. I never even bothered to sign up for the private health insurance I had in the UK and just either user the crappy public one or paid out of pocket, finding the best doctor for the job (instead of what my insurance would have offered).
coderintherye 4y ago
In the U.S. at least, you are still legally required to report the legal identity of any contractor to the IRS and must ask them to fill out an I-9 form: https://www.uscis.gov/i-9-central/complete-and-correct-form-i-9 https://www.uscis.gov/i-9-central/complete-and-correct-form-... Any contractor making >= $600 have to fill the payment and they receive a 1099. There are very few exceptions to that and they are listed in the article.
- varsketiz 4y ago
  Thats interesting. I have contracted with multiple entities in the US for many years and they never asked for anything like that.
  - jimmygrapes 4y ago
    I think what they meant to say is the legal entity, rather than identity; a LLC or other business formation should suffice for most reporting requirements. There may be some exceptions in some areas, but I've contracted with with thousands of entities and never once had to verify the identity of their employees unless it was for individual access (passes/badges, etc.).
    - whynotkeithberg 4y ago
      So basically any real job?
  - shrubble 4y ago
    If you are located outside of the USA then they are not required to gather this info. However if they believe you are a USA citizen or reside in the USA while doing the work, then they are supposed to.
- mgkimsal 4y ago
  (not from the article) but from a quick google search... "businesses that contract with S Corps do not need to issue them a Form 1099-MISC" I'm an s-corp, and yet I still have people 1099ing me. It's more annoying than anything because I get all my tax stuff done quickly, and someone will send out a late 1099 with slightly different numbers (typically error on their end) and... I've just given up caring about that. "You don't send 1099s to your landscaping service, or your office supply store purchases, or the energy company, but you've contracted services with them." "Oh, but you're a person"... with an s-corp registered for 10+ years and a separate employer TIN.
- morpheuskafka 4y ago
  You are required to solicit the taxpayer identification of anyone for whom you are required to file a 1099-NEC form--this is normally done on Form W-9. If the contractor fails to furnish a TIN, you are not required to cease business with them, however you will likely have to respond to the IRS and show that they refused to tell you when you file the 1099s each year. The IRS can assess a $50 civil penalty against the contractor (doubt they bother due to low amount set in statute), but more importantly the employer must withhold 30% backup withholding due to the failure to provide TIN. The employer will have to report the income and withholding on their tax return, which will likely be held up while the IRS verifies the match. I-9/E-Verify is for employees of your entity only and is not completed for independent contractors, nor for temp/contract labor who is employed by a different company (they do the form).
deleted 4y ago
[deleted]
wongarsu 4y ago
In Europe you'd get issues with accounting, both in terms of figuring out value added tax, in terms of your local tax authority asking uncomfortable questions why you have expenses without valid invoices (and yes, an invoice has to show who is invoicing). The first probably isn't an issue in the US, I'm not sure about the second. You could try to set up a company to hide your identity, but how well that works depends on the jurisdiction (in many places it's trivial to figure out the director of a company).
PeterisP 4y ago
It's not an arbitrary choice whether to treat a particular interaction as an employee or as a contractor - the nuances are a bit tricky, but in general it's prohibited to treat it as contracting if it isn't actual contracting but if someone is working what we'd call a standard full time job at a company. The obvious way (mentioned elsewhere here) is that you can reasonably provide services as a business - non-anonymously, non-pseudonymously, disclosing the exact legal identity of your shell company instead of your personal details.
- that_guy_iain 4y ago
  > It's not an arbitrary choice whether to treat a particular interaction as an employee or as a contractor - the nuances are a bit tricky, but in general it's prohibited to treat it as contracting if it isn't actual contracting but if someone is working what we'd call a standard full time job at a company. Yea, but I suspect these are all going to be remote jobs with people in other countries at which point they're all contractors. It's only people in the same country as the company since generally the thing they're trying to avoid is tax evasion and they don't care if they can't tax you.
- cma 4y ago
  Just to underline non-anonymously: https://corpgov.law.harvard.edu/2021/02/04/the-end-of-the-anonymous-shell-company-in-the-united-states https://corpgov.law.harvard.edu/2021/02/04/the-end-of-the-an... Owners can no longer hide their identity with a shell company after a recent law.

swatcoder 4y ago

In the US and comparable jurisdictions, the concept of employee and contractor are not interchangeable and imply differences in things like autonomy and expectations. This is as much to make sure that workers have appropriate protections and that contractors have appropriate freedom as it is about tax reporting or whatever. Far more likely is that these companies aren't well-footed legally and don't realize that they'll only be able to stay under the radar while small. Which is common, but puts a cap on how high-profile they can grow. They'll need to sort things out before they can scale or get involved in regulated industries.

jokethrowaway 4y ago
It's highly debatable and jurisdiction dependant. Plenty of contractors are basically employees paying less taxes and not having holidays. (not that I'm complaining, I'm glad there is a legal way to minimise how much the government steals from me) States are a bit trickier because healthcare is so ridiculously overpriced and therefore people value health insurance provided by an employer. I never even bothered to sign up for the private health insurance I had in the UK and just either user the crappy public one or paid out of pocket, finding the best doctor for the job (instead of what my insurance would have offered).

coderintherye 4y ago

In the U.S. at least, you are still legally required to report the legal identity of any contractor to the IRS and must ask them to fill out an I-9 form: https://www.uscis.gov/i-9-central/complete-and-correct-form-i-9 https://www.uscis.gov/i-9-central/complete-and-correct-form-... Any contractor making >= $600 have to fill the payment and they receive a 1099. There are very few exceptions to that and they are listed in the article.

varsketiz 4y ago
Thats interesting. I have contracted with multiple entities in the US for many years and they never asked for anything like that.
- jimmygrapes 4y ago
  I think what they meant to say is the legal entity, rather than identity; a LLC or other business formation should suffice for most reporting requirements. There may be some exceptions in some areas, but I've contracted with with thousands of entities and never once had to verify the identity of their employees unless it was for individual access (passes/badges, etc.).
  - whynotkeithberg 4y ago
    So basically any real job?
- shrubble 4y ago
  If you are located outside of the USA then they are not required to gather this info. However if they believe you are a USA citizen or reside in the USA while doing the work, then they are supposed to.
mgkimsal 4y ago
(not from the article) but from a quick google search... "businesses that contract with S Corps do not need to issue them a Form 1099-MISC" I'm an s-corp, and yet I still have people 1099ing me. It's more annoying than anything because I get all my tax stuff done quickly, and someone will send out a late 1099 with slightly different numbers (typically error on their end) and... I've just given up caring about that. "You don't send 1099s to your landscaping service, or your office supply store purchases, or the energy company, but you've contracted services with them." "Oh, but you're a person"... with an s-corp registered for 10+ years and a separate employer TIN.
morpheuskafka 4y ago
You are required to solicit the taxpayer identification of anyone for whom you are required to file a 1099-NEC form--this is normally done on Form W-9. If the contractor fails to furnish a TIN, you are not required to cease business with them, however you will likely have to respond to the IRS and show that they refused to tell you when you file the 1099s each year. The IRS can assess a $50 civil penalty against the contractor (doubt they bother due to low amount set in statute), but more importantly the employer must withhold 30% backup withholding due to the failure to provide TIN. The employer will have to report the income and withholding on their tax return, which will likely be held up while the IRS verifies the match. I-9/E-Verify is for employees of your entity only and is not completed for independent contractors, nor for temp/contract labor who is employed by a different company (they do the form).

deleted 4y ago

[deleted]

wongarsu 4y ago

In Europe you'd get issues with accounting, both in terms of figuring out value added tax, in terms of your local tax authority asking uncomfortable questions why you have expenses without valid invoices (and yes, an invoice has to show who is invoicing). The first probably isn't an issue in the US, I'm not sure about the second. You could try to set up a company to hide your identity, but how well that works depends on the jurisdiction (in many places it's trivial to figure out the director of a company).

PeterisP 4y ago

It's not an arbitrary choice whether to treat a particular interaction as an employee or as a contractor - the nuances are a bit tricky, but in general it's prohibited to treat it as contracting if it isn't actual contracting but if someone is working what we'd call a standard full time job at a company. The obvious way (mentioned elsewhere here) is that you can reasonably provide services as a business - non-anonymously, non-pseudonymously, disclosing the exact legal identity of your shell company instead of your personal details.

that_guy_iain 4y ago
> It's not an arbitrary choice whether to treat a particular interaction as an employee or as a contractor - the nuances are a bit tricky, but in general it's prohibited to treat it as contracting if it isn't actual contracting but if someone is working what we'd call a standard full time job at a company. Yea, but I suspect these are all going to be remote jobs with people in other countries at which point they're all contractors. It's only people in the same country as the company since generally the thing they're trying to avoid is tax evasion and they don't care if they can't tax you.
cma 4y ago
Just to underline non-anonymously: https://corpgov.law.harvard.edu/2021/02/04/the-end-of-the-anonymous-shell-company-in-the-united-states https://corpgov.law.harvard.edu/2021/02/04/the-end-of-the-an... Owners can no longer hide their identity with a shell company after a recent law.