employer withheld taxes but didn't pay them

[jlp]

My mom just found out her employer (a solo insurance adjuster) has been evading taxes for probably his whole life, and hasn't paid her FICA or state taxes in quite some time (although he had claimed to be withholding, and her W2s indicate this, and she has always filed her taxes).

He is closing the business because of his financial woes, but claims he has spoken to the IRS (assuming for his own personal tax evasion issues) and said they told him he is "judgment proof." He has no assets and is basically one step away from bankruptcy, so I guess the IRS sees it as a lost cause.

What are the implications for my mom? She had no knowledge of this until today. Now she is losing her job... are her future SS benefits are possibly at risk? I realize the IRS says ultimately it's the employee's responsibility, but she has just had the rug pulled out from underneath her... how could they go after her? Also, she probably cannot collect unemployment if nothing was paid into the system??

Thanks to anyone for advice. I am really desperate and upset for her.

Jennifer

[judg4]

She should consult with the IRS; his acts were criminal and the IRS does not take that lightly. It is doubtful they just said, he is judgment proof.
World Law's lawyers could also probably help resolve this if need be. You may email them on the home page.

[okellis]

Jlp,
My situation is just like your moms. My employer, a sole practioner attorney, has been doing this to me for several years I recently discovered. I should have paid more attention when the SS admin sends out those bi-yearly reports about your SS benefits. The last one I recieved only showed him paying in taxes on me 2 of the 6 years I have been there.
I thought maybe there had been a mistake, a misprint, so I called the number on the paper. I told them my concern. A few days later I had an appointment to go in to the SS office. I had to take my tax returns. They looked them over, copied a few things, told me I had done what I needed to and sent me on my way. A couple of weeks later I got a letter in the mail stating they had updated my earnings for the 4 years that hadn't been on the paper.

Yesterday at work I answered the phone. It was the state revenue cabinet. Since boss nor his wife were there they asked me to give him the message that they were calling about withholding taxes. (the theme to *Jaws* comes to mind). I hope this isn't going to bite me somehow.

[jlp]

Thanks judg4. I have my doubts about whether he really went to the IRS to begin with.

okellis, thanks for posting your story. That's what I'm hoping happens for my mom too. But she is worried about what they will do to her former boss... she worked for him for 23 years and because of that, he is like family to her. Dysfunctional family, DEFINITELY, but she does care for the man... despite what he has done to her. She's just too nice in my opinion!!

We are waiting to find a tax attorney. I know we could probably just go straight to the IRS but I think my mom wants to hear from a neutral third party what might happen to the boss. Anyway, it would be worth the initial consult fee to figure things out ahead of time.

Anyone know one in the west suburbs of Chicago?

[okellis]

jlp,
Look on alllaw.com and I bet you'll find someone. Hopefully the initial consult will be free.