Law Office of Camron Hoorfar, PC

It is critical for business owners to correctly determine whether the individuals providing services are employees or independent contractors.

An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker’s services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers or auctioneers are generally independent contractors.

Independent contractor vs. employee
Whether a worker is an independent contractor, or an employee depends on the relationship between the worker and the business. Generally, there are three categories to consider.

•  Behavioral control − Does the company control or have the right to control what the worker does and how the worker does the job?
•  Financial control − Does the business direct or control the financial and business aspects of the worker’s job. Are the business aspects of the worker’s job controlled by the payer? Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.
•  Relationship of the parties − Are there written contracts or employee type benefits such as pension plan, insurance, vacation pay? Will the relationship continue and is the work performed a key aspect of the business?

Misclassified worker 
Misclassifying workers as independent contractors adversely affects employees because the employer’s share of taxes is not paid, and the employee’s share is not withheld. If a business misclassified an employee without a reasonable basis, the business can be held liable for employment taxes for that worker. Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes. Workers who believe they have been improperly classified as independent contractors can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report their share of uncollected Social Security and Medicare taxes due on their compensation.

Voluntary Classification Settlement Program
The Voluntary Classification Settlement Program is an optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future employment tax purposes. This program offers partial relief from federal employment taxes for eligible taxpayers who agree to prospectively treat their workers as employees. Taxpayers must meet certain eligibility requirements and apply by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.

Who is self-employed?
Generally, someone is self-employed if any of the following apply to them.

•  They carry on a trade or business as a sole proprietor or an independent contractor.
•  They are a member of a partnership that carries on a trade or business.
•  They are otherwise in business for themselves, including a part-time business.

Self-employed individuals, including those who earn money from gig economy work, are generally required to file an tax return and make estimated quarterly tax payments. They also generally must pay self-employment tax which is Social Security and Medicare tax as well as income tax. These taxpayers qualify for the home office deduction if they use part of a home for business.

Courtesy of the IRS

The Internal Revenue Service has awarded new contracts to three private-sector collection agencies for collection of overdue tax debts. The new contracts begin Thursday following today’s expiration of the old contracts.

Beginning Thursday, Sept. 23, 2021, taxpayers with unpaid tax bills may be contacted by one of the following three agencies:

Notification by IRS and the private collection agencies
The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA).

• First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account was assigned to a PCA and giving the name and contact information for the PCA. This mailing will include a copy of Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency (.pdf).
• Following IRS notification, the PCA will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer’s privacy and security, both the IRS letter and the PCA’s letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate.

How it works
The private collectors will identify themselves as contractors collecting taxes on behalf of the IRS. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act, and like IRS employees, must be courteous and must respect taxpayer rights.

Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy.

Payment options
The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made directly to the IRS. A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. To find out more about available payment options, visit IRS.gov/Payments.

Need tax assistance? Call us at 816-524-4949 or visit our website to schedule a consultation.

Inflation held firm in August as consumer spending rebounded sharply from a July decline, according to data released Friday by the Commerce Department. The personal consumption expenditures (PCE) index, the Federal Reserve’s preferred gauge of consumer price growth, rose 0.4 percent in August and 0.3 percent without food and energy prices, the same rates as in July. Annual inflation ticked higher in August, rising 0.1 percent from July to 4.3 percent, while annual inflation without food or energy prices stayed even at 3.6 percent.

The rate of consumer price increases has appeared to slow from a sharp rise this summer, but inflation has remained at decade-plus highs longer than many economists had anticipated. A combination of severe shipping backlogs, supply chain snarls, hiring troubles in key industries and the stifling impact of the delta variant have all kept upward pressure on consumer prices, with little clarity into when they will ease. Consumer spending, however, snapped back strongly from a 0.1 percent decline in July, rising 0.8 percent in August and 0.4 percent when adjusted for inflation.

Struggling with debt? Give us a call at (816) 524-4949 or visit our website to schedule a consultation with an attorney.

California may become a ground zero for a homelessness crisis, as the end of the state’s temporary halt to evictions — which officially expired last Thursday — means renters in arrears face the prospect of being forced from their homes. Until September 30, state law automatically banned landlords from evicting people for unpaid rent. However, beginning Friday, tenants with unpaid rent can only be protected from evictions if they have applied for assistance. Tenants are still responsible for unpaid rent, but can’t be evicted for it if they meet this threshold.

As a result, Friday officially marked the countdown for the Golden State to insulate tenants against what one advocate called a looming “tsunami” of forced dislodging of renters, a microcosm of what indebted renters are facing nationwide after the Supreme Court invalidated a federal moratorium. California is scrambling to make sure tenants with unpaid rent know they can still stay in their homes after that date — but only if they have applied for assistance from the state, which has a total of $5.2 billion of federal dollars to help pay back rent owed by tenants who lost jobs or income. As of Monday, more than 309,000 households have applied for assistance, asking for nearly $3 billion.

Struggling financially? Give us a call at (816) 524-4949 or visit our website to schedule a consultation to determine what your best option is.

A suburban Chicago lawyer has admitted that he called a judge a clown and an opposing lawyer a “lowlife bottom-feeder,” but he said his comments were truthful or constitutionally protected speech. Lawyer Edwin Franklin Bush III of Des Plaines, Illinois, “vigorously contested” ethics allegations by the Illinois Attorney Registration & Disciplinary Commission in an answer filed Aug. 27, the Legal Profession Blog reports.

Bush made the comments last year while representing himself in his divorce case, according to the IARDC’s Aug. 5 complaint. Bush contended that his estranged wife was lying, his children missed him and wanted parenting time with him, and the judge was moving too slowly to grant a hearing on remand from an appeals court.

Bush allegedly sent emails with these statements to opposing lawyers:

• “I strenuously object to you being a lowlife bottom-feeder, who suborns perjury, breaks the IRPC and extorts your own client.”

• “If it means your fat ass and your suborning perjury piece of s- -t daughter [who is one of the lawyers] have to get an order of protection against me, we will be in court … one way or the other. You are all child abusing filth, all of you. Bring it. When the justice system fails, I will have my recourse.”

In his answer, Bush said statements about the opposing lawyers were “entirely truthful and accurate.” He also said the statements were made while the lawyers were “purposely countermanding” the remand hearing mandated by an appeals court. “Domestic relations attorneys are well known amongst the bar and the public to be bottom-feeders,” he wrote in the answer. Bush said he has “spoken to ethics attorneys for years who note the volume of complaints they receive involving these attorneys and call these attorneys bottom-feeders themselves. Domestic relations attorneys generally graduate from third- and fourth-tier law schools and will do almost anything for money, including suborn perjury from mentally ill parents.”

The complaint also accuses Bush of making these statements to the judge during a hearing:

• “That’s why this is the clown car. You are a clown.”

• “You’re a child abuser. I mean, honestly, I should call DCFS on you because you’ve abused these children for two years. What you have done and what people like you do to people all over this country is a disgrace.”

Bush said many of the statements to the judge were protected First Amendment speech. Bush said the judge violated the remand order and flip-flopped on whether to grant him parenting time. Judges are “no longer privileged to the normal courtesies” when they abuse their power and an Illinois appeals court mandate, Bush wrote. Bush also said the judge was suffering from an “undiagnosed brain tumor” at the time, causing memory loss and erratic behavior.

Bush is also accused of making secret recordings of conversations during counseling sessions and with his estranged wife in violation of Illinois law. Bush said one session was recorded with the consent of the doctor, and he recorded the sessions to protect the rights of himself and his children. He also said the recordings were justified under a crime-fraud exception because he knew that the crime of perjury was being committed.

Bush added that parents “routinely record themselves and their children to protect themselves from false allegations in kangaroo custody proceedings.”

“This commission is apparently lost and cannot distinguish between the cloak of authority and the cloak of corruption,” Bush wrote. “Domestic relations courts and their surrounding cottage industries are predatory and resemble organized crime—seizing children from fit parents and then selling them back with unnecessary and unwanted ‘services.’ That is none other than child trafficking.” Bush told the ABA Journal on Friday that the IARDC struck his answer that morning. The IARDC had contended in its motion to strike that Bush could not go beyond affirming or denying the allegations. Bush says he plans to file a motion for reconsideration.

The IARDC “basically wants to scrub this off the internet,” Bush says. He contends that his case is a matter of public interest, and he has a right to assert affirmative defenses in his answer to the ethics complaint.

Bush says he was diagnosed with stage 4 pancreatic cancer about four days after he was served with the ethics complaint, and the cost of treatment leaves no money for him to hire a lawyer. He hasn’t seen his children since the diagnosis. “The only thing I care about is my kids,” he says. “That’s it.” He is receiving chemotherapy, and his tumors may be operable. But the diagnosis carries a poor prognosis, and Bush feels some urgency to see his children again.