Eli Posted January 18, 2008 Report Share Posted January 18, 2008 Attorney is a sole proprietor. Pays contract labor for adminstrative & legal assistants. Does not plan to incorporate anytime soon. Would he need an EIN or is it ok just to continue using his SSN on 1099 Misc's? Thanks!! Eli Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 18, 2008 Report Share Posted January 18, 2008 Pays contract labor for adminstrative & legal assistants. Unless he is an employer, he does not need an EIN. Use SSN on 1099's. Bigger question is how the admin people are not employees. I don't know the details, but that raises a red flag for me. I would ask some questions and advise the client on the difference between and employee and a contractor. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
Karen Lee Posted January 18, 2008 Report Share Posted January 18, 2008 I agree with Tom, Eli. I have same issue going on with Chiro in town. Karen Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 18, 2008 Report Share Posted January 18, 2008 He's opening himself to BIG penalties, and he sure can not use ignorance as a defense. In fact, they like to make examples of attorneys. Also, he should use an EIN anyway, so that the workers can efile without problems. If he uses his SSN it's going to create problems for them, and they are more likely to decide to file the new 8919, and then he's in deep s__t. Quote Link to comment Share on other sites More sharing options...
Eli Posted January 18, 2008 Author Report Share Posted January 18, 2008 He's opening himself to BIG penalties, and he sure can not use ignorance as a defense. In fact, they like to make examples of attorneys. Also, he should use an EIN anyway, so that the workers can efile without problems. If he uses his SSN it's going to create problems for them, and they are more likely to decide to file the new 8919, and then he's in deep s__t. I tried to convince him, but he's an ATTORNEY :-). At least he's considering the EIN. I just wanted to make sure I had him on the right track. Thanks for the input! Eli Quote Link to comment Share on other sites More sharing options...
Slappy Tax Posted January 18, 2008 Report Share Posted January 18, 2008 It looks like you're going to have to dumb it down for him. See if he can understand this. By using his SSN on the 1099s, he is disclosing his Social Security Number to lots of people who should not have it. Plus he's probably disclosing it to the boyfriends, girlfriends, friends, and who knows who else of the people he issues the 1099s to. An FEIN is free and instantaneous via the IRS website. What possible reason could he have for not obtaining one? If these reasons aren't good enough for him, he's obviously intent on hanging himself with his own rope. I'd leave him twisting slowly in the wind. Also, your post doesn't make it 100% clear whether he's using contract labor (i.e., employee leasing) or is treating his own workers as independent contractors. Quote Link to comment Share on other sites More sharing options...
Slappy Tax Posted January 18, 2008 Report Share Posted January 18, 2008 To continue, if he is actually treating employees as 1099-MISC contract labor, the other posts are quite correct. He'd better not fire any of his workers or make any of them mad. If he does, all it will take will be one of them to file an SS-8 with the IRS and/or use the new Form 8819, and he'll find himself paying the employment taxes for that person and for similarly situated personnel for this year and most likely 2 additional years, plus hefty penalties. I had one client who had almost the identical circumstances except that she was the worker, not the law firm. She worked as a receptionist for about 8 months, and at the end, the firm handed her a 1099. She had no idea what that meant until she was sitting in my office. We submitted a Form SS-8 and she won, i..e, was classified by the IRS as an employee. In discussing it with the IRS agent who was arbitrating the matter, I told her how dumbfounded I was that the law firm would even be contesting this one. It was not even close to being a close call. The agent said that law firms and attorneys are the worst when it comes to this. They think they know everything, and if it comes to something they don't know, they just assume they can BS their way past it. So I know exactly what you're describing. Quote Link to comment Share on other sites More sharing options...
Eli Posted January 18, 2008 Author Report Share Posted January 18, 2008 Slappy, Thanks for your always complete info. I think this pretty much is the case with this gentleman. I don't know a whole lot about him, he just asked if I could do the 1099's for him. I recommended to him that he get the EIN so he wouldn't put his SSN out any more than he needed to. I think this is what he will do. Thanks again!! Eli Quote Link to comment Share on other sites More sharing options...
Slappy Tax Posted January 18, 2008 Report Share Posted January 18, 2008 Eli, Just have him give you written authorization to obtain the FEIN for him, then you can spend about 5 minutes at the IRS website, obtain the FEIN, and charge the attorney a healthy fee for your time. Attorneys are very acquainted with someone charging for his time. (I'm pretty sure the IRS requires you to have from him a signed SS-4, even though you will apply online for the FEIN on his behalf. I'd do up an SS-4, fax it to him, have him sign and fax it back, then go online and obtain the FEIN. Problem solved. Easy money.) Quote Link to comment Share on other sites More sharing options...
JohnH Posted January 18, 2008 Report Share Posted January 18, 2008 Eli: Is it possible that he's trying to set you up as a scapegoat in case he gets his hand called on the 1099's? You know, the old "you should have told me if this was wrong" argument. You might want to make your recommendation to him in writing, and also furnish him a blank SS-8 to look over while you're at it. (Or better yet, tell him you don't have itme to do it.) Quote Link to comment Share on other sites More sharing options...
Eli Posted January 18, 2008 Author Report Share Posted January 18, 2008 Eli: Is it possible that he's trying to set you up as a scapegoat in case he gets his hand called on the 1099's? You know, the old "you should have told me if this was wrong" argument. You might want to make your recommendation to him in writing, and also furnish him a blank SS-8 to look over while you're at it. (Or better yet, tell him you don't have itme to do it.) John, I never thought about it that way. Thanks for the heads up. As always I appreciate the input. Eli Quote Link to comment Share on other sites More sharing options...
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