sticky mess - do I just run?

[WITAXLADY]

Legal couple has a great painting business.

2 of the family not legal from Mexico help him as equal partners.

How can they be paid?

Form a LLC in Mex so he can hire them?

By not showing the deductions, which I found out is what they were doing - they no longer qualify for their insurance - income was too high, and guess what -

No insurance and the couple are having a baby and need insurance - which at the business' income is a minimum $10,000 for a policy.

Any ideas?

Thank  you,

D/WI

 

 

 

 

[Lee B]

This is one of the more interesting aspects of our society.

There are  millions of employees in this country working with fake ID and invalid social security numbers.

Both our federal and state governments happily accept the taxes withheld from these paychecks and employers suffer little or no penalty.

Who do you think, picks our fruit and vegetables, works in our meatpacking plants, cleans our hotel rooms, and maintains our yards?

Very few Americans will do this work.

 

[BrewOne]

Definitely a common problem with no elegant solution.

The can of worms is pretty much bottomless.  The workers could get an ITIN and file a federal tax return but as an employer you're also supposed to have an I-9 filled out (attesting that the worker has shown the employer "acceptable documents") and my State just passed more punitive actions against employers hiring illegals.

The workers probably paid a huge sum to a coyote to get into the States, it's doubtful they would be willing to go back to try and re-enter legally (although I knew a contractor that did this years ago because he had such a good crew)--probably a whole different ballgame now with getting a worker here legally. Just thinking out loud here, not much help I know.

One possible is the health insurance premiums are deductible and if they get a policy from the Marketplace (which is probably one of the few places they can get a decent insurance policy), along with retirement contributions lowering their AGI, their premiums might be above the 8.5% (or whatever the current ceiling is) and they could get a premium tax credit.

[JohnH]

I'd run. Having compassion for their plight, nevertheless I'd still run).  Even if it is possible to form an LLC in Mexico, there will likely be legal complications and reporting.  In the end, when it blows up, all fingers will point back to you since you provided the advice (even if you didn't, you'll probably still be blamed).  

 

[jklcpa]

Run!  If you offer advice on this at all it could constitute beyond tax advice into legal advice, and you definitely don't want that kind of risk exposure.  I doubt your E&O or malpractice insurance would cover you.

No matter the attractiveness of fees or having off-season additional work, imho this client is NOT worth the risk.

[Medlin Software, Dennis]

Would not touch professionally or personally (as personal actions often bite us professionally).

---

The anchor baby can likely qualify for some sort of insurance, depending on locality.

Terribly tough moral dilemma for sure. Easy to fall in line with the laws of the land. Tougher to live and let live. While higher in consequence, no different than ignore/report of: unlicensed business, neighbors breaking CCR's or local ordinances, etc.

I hear the cost of documents is nearly unchanged since the 80's.

[Lee B]

I don't know about other states, but here in Western Oregon there are multiple sources of fairly good quality fake ID for a reasonable price.

i am actually surprised your clients didn't take care of this problem in advance.

The knowledge of how to deal with this is widespread in all the immigrant communities.

[ILLMAS]

This happens all the time, just some races fall below the radar.  Just watch the TV 90 Day Fiance.  

[Medlin Software, Dennis]

Just now, ILLMAS said:

This happens all the time, just some races fall below the radar.  Just watch the TV 90 Day Fiance.  

Times are different.  Was not that long ago the US PAID for legal citizens to return to their home location via the "Repatriation" Act (because of brown fear, repeated at internment camps for another set of legal residents/citizens just a few years later).  My grandfather and uncle returned to PI under this act, and died/was murdered a few years later, Dec '41 (private citizens).  My grandfather had committed the sin of marrying a pretty white nurse and had babies.  He legally came to the US as a "houseboy" to the wife of an Army officer stationed in PI.

Another relative was conscripted off the reservation to fight for the Confederacy.

[ILLMAS]

32 minutes ago, Medlin Software, Dennis said:

 

Another relative was conscripted off the reservation to fight for the Confederacy.

Wow, that was around the time the states of California, Nevada, Utah, New Mexico, most of Arizona and Colorado, and parts of Oklahoma, Kansas, and Wyoming were part of Mexico.

[WITAXLADY]

Thank you!! Definitely no advice then!!

And this is her 3rd child so - I think she would easily qualify for Marketplace and maybe even a form of low-income health ins

D /WI

[Corduroy Frog]

Make a clear demarcation of what your responsibility is.  They have issues outside of your tax practice.  If the workers can get a SS# or ITIN and they get it from Fast Eddie's printing press, then where they get it is not your problem as long as you are not aware of that.  Their insurance is not your problem as a tax preparer, nor is the baby forthcoming.  Prepare the return (a 1065 probably) if you can.  Send them to social services with everything else.  If these factors prevent you from filing the return and answering the questions concomitant with the return, then yes, run.

I perceive that you are a very caring person and are concerned for their welfare outside the scope of your service.  That's a credible thing.  But remember there are people who can make a better living suing people than they can on their own merits.