Since all states have a statute of limitation on debt, it is incorrect to state that any debt can be owed forever. You may have a moral responsibility, but in every state in the US, you are released from any legal responsibility after the statute of limitations has run.
Thank you for all the replies, guys–great message board!
Regarding the list of requirements for being classified as an independent contractor–my state has those, and I understand so does the IRS. According to those guidelines, I might well be classified as an employee for that particular organization (though I am a bona fide independent contractor for other clients).
One concern I have is whether it would be wise to complain to the IRS or to the state workforce commission regarding my likely (shoulda been) employee status. This lady’s organization is very small, and I don’t think she even has an EIN. Her books are a mess (I’ve heard), and she’s been audited repeatedly by her grantors–hence the well going dry.
If I did complain to the state or to the Feds would I be getting myself in trouble, or suddenly creating a massive tax bill for myself?
Thanks again
Also, I should mention that she has had several other people working for her, for the past several years, also most likely on a supposed “independent contractor” basis–everyone from other teachers to the office help to the cleaning lady. I get the sense that she really is abusing the system in this regard.
In general, the IRS does not go after it’s informants. If they did, who would ever inform them of tax violations?
In fact, there have been cases where one ex-spouse (during/after a divorce) reports that their jointly-filed return was fradulent, and provides documentary evidence. The IRS made a deal with the informing spouse, letting them off easy, and went after the other spouse real tough.
Actually, as an Independent Contractor, you probably pay more taxes than you would as an employee (both halves of Social Security, for example). You might find that you actually owe less taxes!
Which t-bonham covered with
Which only muddled the previous statement that debts are owed forever. I sought to clarify the issue.
At the risk of going further down a tangent, keep in mind that the statute of limitations only limits the time you have to file suit. Once you have a judgment, the statute of limitations is no longer in play, although there may be other laws that limit your time to enforce the judgment. In Texas, for instance, judgments are generally good for 10 years, and their validity may be extended further if the judgment creditor takes certain steps to do so. As far as I know, there’s no absolute limit on how long a judgment may remain enforceable.