Employer tax problem

I have an employer that didn't withhold taxes from me for a better part of the year. I went to work for him in feburary. Now he saying that i am a sub contractor for him. My job was titled "operations manager". He sold security cameras internationally and my job title was "operations manager". He dictated my work duties on a hour to hour, day to day basis. I did not sign anything stating that i was a subcontractor. After speaking with his accountant and realized that he was going to have penalties for not withholding and paying taxes he is saying that i was a subcontractor and is going file a 1099. I live in the state of Texas if this matters. I also found this:
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4.23.8.5 (02-01-2003)
IRC Section 3509
1. When an employer erroneously classifies an employee as an independent contractor and does not withhold federal payroll taxes, the employer is liable under IRC section 3102 and IRC section 3403 for the employee's share of FICA tax and the employee's income tax withholding. This is true even if the employer does not withhold the tax from the employee.

2. Although relief provisions under IRC section 3402(d) and IRC section 6521 are available, employers sometimes find it difficult to locate and get the cooperation of former employees in order to avail themselves of the relief.

3. Pubic Law 97

That is right--he has a problem and he needs to resolve it. You were an employee.

That's right. I'm going through this with my brother right now. What we did was not file the 1099 on his taxes, the IRS came back and said "NO NO" so we rebutted the claim that he was an independent contractor and owed those thousands of dollars. The IRS agreed, so now we're in the process of getting IRS to agree that the employER is responsible to pay the taxes. I'm using that very code as proof of him not having ANY liability in this. He should be free and clear because it was their mistake! Well, they knew what they were doing so it's not really a mistake...

I had the same issue but eventually I did partly pay the employer back. We compromised that I would pay half of the taxes that he had to pay when it was determined that I was an employee.