We have a major problem in this country with undocumented workers. On the one hand, we need them.
This is particularly true when it comes to people in the lawn maintenance business. It is next to impossible to get employees who are willing to work in the heat. Most of the jobs are filled by undocumented aliens. This presents a major problem for the employer. On the one hand, he desperately needs the workers and is willing to pay them. On the other hand, they are undocumented, have no social security numbers and no way to cash checks, even if paid by check. Our immigration system is broken…no big news there.
We need to provide a method for workers to come here. Rather than pay a “coyote” to bring them here illegally, why not just pay an entry fee to the United States, get a work visa that is renewable every two years, get a tax identification card and allow people to work and provide for their families. As it stands, our insane immigration system makes tax criminals out of American business people who desperately need the workers.
It is a real problem for the small businessman to attempt to pay an “off the books” cash payroll. Many of the banks will report them for making large regular cash withdrawals. This will prompt an audit and can lead to criminal prosecution for employment tax fraud.
As a criminal tax lawyer all too often I encounter taxpayers who would love to comply with the law but find it impossible to do so. Some people use “payroll services” that often turn a blind eye to phony social security numbers or identification. What we need is Immigration and Tax reform. If you are under audit and have paid an off the books payroll, contact a criminal lawyer before doing anything. If you have not been audited but are concerned you might be, and have employees “off the books”, you are at risk of criminal prosecution.
Our laws put many people between a rock and a hard place when it comes to complying. Do not put off finding a solution to this problem. Do not subject yourself to Federal prison for tax fraud. The laws will eventually change, but until they do, you have to find a way to comply.