Spinoff-White collar crime vs violent crime

m in Israel

Mon, May 04 2015, 5:20 am

MagentaYenta wrote:

Yes I do see it as white collar crime, but a bit minor when compared to the Madoffs or those that loot charities and pensions. Those individuals are expecting others to shoulder their share of taxes while they evade their own responsibility. I'm a tax and spend liberal so I'm not in denial of benefits or dependency care. For instance an unlicensed preschool evades costly regulation, to increase their earnings. There is no high ground in their behavior which may put children in their care at risk.

As others have said, you are using the term incorrectly. White collar crimes are generally crimes committed by professionals or businesses, usually involving fraud. (Ora and Zaq both explained this well in earlier posts). A plumber works a "blue collar job" and his tax evasion is just that -- tax evasion. Would you consider someone who commits a home invasion without a weapon a "white collar criminal" because it is ultimately a financial crime and not a violent one?

Your OP clearly mixes many different types of crimes under one lump category, and it really feels to me like you have an agenda here.

33055

Mon, May 04 2015, 6:44 am

Iymnok wrote:

In some locations renting out a basement is legal providing certain thing are met. Such as windows, ceiling height, proper plumbing and electrical, safety measures. And they don't always need to be registered.
Babysitting is legal without a license if the babysitter is over a certain age and the ratio is low enough. (This creates a problem when your 16 year old niece babysits for you for the chassuna and you have 7 kids under 12)

There are also rules if you pay your babysitter $600 or more for the year. You have to 1099 her. Her income also has to be reported after a certain point. Most people don't report. If they did, they would have difficultly getting babysitters, cleaning help, causal labor, etc.

Most people break tax laws either intentionally or unintentionally because of their complexity. Some break them because of greed.

The only laws I break are traffic laws. I will speed up to 10 mph above the limit. I have someone else deal with my cleaning help. I strongly suspect they are not reporting their income. I don't pay anyone more than $600 a year for casual labor.

Fraud is widespread in my community. It is institutionalized. Most businesses pay part or all off the books. I genuinely don't know how people live collecting benefits and working off the books. I get nervous just thinking about it when someone suggests anything like this to me. It isn't worth my peace.

MagentaYenta

Mon, May 04 2015, 11:00 am

m in Israel wrote:

Thank you for a well reasoned post. I think the only place you ran afield was in the home invasion. But you've added something to the conversation and got me to understand a different POV. That is my agenda, trying to understand justifications, and shifting moral sands. How individuals separate their own actions from illegal behaviors.

With regards to daycares, my concern is merely the child safety aspects. Are there enough helpers and a plan to evacuate in case of a fire or other major emergency. If the main exit of a basement childcare can't be used for the purposes of evacuation, what other provisos are in place. Things like that.

Squishy comes from a community where avoiding taxes by paying off the books is not unusual and typifies it as widespread. I tend to agree with her that doing something of this nature would be dissonant for me. But it's not dissonant for others, and that too is part of my 'agenda', understanding why some folks notice the dissonance and how they react to it.

SRS

Mon, May 04 2015, 1:13 pm

Squishy wrote:

I always (clarification: should read OFTEN, not always) notice that people in high fraud communities are also mistaken about their legal responsibilities, making them more onerous than they need be. So let's talk about the misconception above.

A babysitter in your home is probably (clarification: most likely) an employee. As the employer, you are responsible for providing them with a W-2, not a 1099, and withholding taxes and remitting those taxes. You never have to provide a 1099 for a babysitter with their own business our of their own location unless you are using them as a subcontractor for your own babysitting business (clarification: a babysitter that is running their own business from their own location). However, if you want to get your tax credit for babysitting fees paid so you can work should you want to receive reimbursement from a dependent care FSA account, you will need their information.

Regarding cleaning people, if you determine they are your employee, then you need to pay them as an employee. If they are a contractor (clarification: which you would need to determine through evaluating the cirumstances), you would only need to provide a 1099 if they are doing work for you in the course of your business. So, if you hire (clarification: CONTRACT with, not hire) a cleaning person and pay them $600 during the course of the year to clean rental condos or your home office, issue a 1099. If you hire (clarification: CONTRACT with, not hire) them for your own personal purposes, you don't have responsibility for their tax payments.

The reason I am pointing any of this out is that every.single.time someone in the frum community commits some horrific tax evasion or theft, everyone points fingers saying hey, you don't give your cleaning lady a W-2 or 1099 and there is usually (clarification: necessarily, not usually) not a responsibility to do so. And instead of having conversations to launch real change, we allow the evaders to point fingers at us as if "we" are criminals when we are not.

Last edited by SRS on Mon, May 04 2015, 3:40 pm; edited 2 times in total

33055

Mon, May 04 2015, 1:22 pm

MagentaYenta wrote:

Sometimes I feel like I have aspergers because I react to fraud so different than others. I am take the law as something to be obeyed. I am often told I am too proper. I never felt like this before I moved to Monsey.

I dont think it is so noticed because everyone is doing it to a certain extent including the leaders. If you grow up with it at home and it is reinforced in school and in society then how can you feel it is wrong?

33055

Mon, May 04 2015, 1:45 pm

SRS wrote:

I always notice that people in high fraud communities are also mistaken about their legal responsibilities, making them more onerous than they need be. So let's talk about the misconception above.

A babysitter in your home is probably an employee. As the employer, you are responsible for providing them with a W-2, not a 1099, and withholding taxes and remitting those taxes. You never have to provide a 1099 for a babysitter with their own business our of their own location unless you are using them as a subcontractor for your own babysitting business. However, if you want to get your tax credit for babysitting fees paid so you can work should you want to receive reimbursement from a dependent care FSA account, you will need their information.

Regarding cleaning people, if you determine they are your employee, then you need to pay them as an employee. If they are a contractor, you would only need to provide a 1099 if they are doing work for you in the course of your business. So, if you hire a cleaning person and pay them $600 during the course of the year to clean rental condos or your home office, issue a 1099. If you hire them for your own personal purposes, you don't have responsibility for their tax payments.

The reason I am pointing any of this out is that every.single.time someone in the frum community commits some horrific tax evasion or theft, everyone points fingers saying hey, you don't give your cleaning lady a W-2 or 1099 and there is usually not a responsibility to do so. And instead of having conversations to launch real change, we allow the evaders to point fingers at us as if "we" are criminals when we are not.

Your "always" is wrong. I all well versed on my legal responsibilities. Your post is wrong on my ignorance and wrong on the law.

ANY INDIVIDUAL YOU EMPLOY IN YOUR HOUSEHOLD WHOM YOU PAY DIRECTLY MORE THAN $1900 ( in the calender year 2015) must receive a W 2 and have taxes withheld. You are also responsible to remit soc sec and Medicare tax. Should you fail to collect it, you are still responsible for it.

There is no loophole that allows household help classified as babysitter to be taxed while household help classified as cleaning help is tax free. Everyone would reclassify their employees as household cleaners and say child minding is incidental to the main work.

Fox

Mon, May 04 2015, 1:51 pm

MagentaYenta wrote:

Squishy comes from a community where avoiding taxes by paying off the books is not unusual and typifies it as widespread. I tend to agree with her that doing something of this nature would be dissonant for me. But it's not dissonant for others, and that too is part of my 'agenda', understanding why some folks notice the dissonance and how they react to it.

I agree that it's fascinating how people respond to dissonance in their lives -- and even what they consider to be dissonant.

As a Chicagoan, I might have a different standard for wrongdoing than others. I mean, this is a state where former governors once had their own table in federal prison.

However, I think that complexities and featherbedding that characterize most laws tend to place a stumbling block before the blind. They cause basically honest citizens to become cynical and provide an easy excuse for those who are looking to circumvent the law anyway.

For example, in many municipalities, it is illegal to have a small Pesach kitchen. I believe NYC eventually passed an exemption for this, but in most places, it's still problematic and requires all kinds of appeals, etc.

Likewise, day care centers (at least in Illinois) require entrances that are used exclusively by children and center staff, making it almost impossible for all but the largest businesses to provide on-site child care.

And I have to admit my eyes glazed over when reading SRS's discussion of who is an independent contractor and who is an employee. A flat tax rate would solve all those problems, but you remember how popular it was when Steve Forbes suggested it.

I heartily recommend P. J. O'Rourke's book, "A Parliament of Whores," essays on how few of us really want fair, honest laws or enforcement of those laws.

SRS

Mon, May 04 2015, 3:26 pm

Squishy wrote:

No, it isn't so cut and dry.
There are multiple tests to determine if the person you bring in to clean your home is a contractor or an employee. If you control their work schedule, tell the worker what to do and how to do it and where to do it, they are likely your employee. This is even more true if you provide their cleaning supplies or ask them to wear a certain uniform as I've heard some families do. The is certainly true if you require them to clean your floor a certain way or micromanage them in other ways.

If the cleaning person holds themselves out as being in the cleaning business, tells you when they will come to clean, provides their own supplies (or has investment in their own business like having subcontractors or employees of their own, a vehicle, runs an advertisement or canvases the neighborhood with fliers), and can send a replacement person without your objection and controls how they do the job, they are a contractor.

From what I gather from looking around my neighborhood and other neighborhoods, cleaning people fall into both categories. There are some cleaning people that set their schedule and control their time. If the cleaning person tells you when they will come and won't engage in certain things like running errands at your behest or watching children, as examples, because they are in the cleaning business, then you likely have a contractor. The larger their client base, the more likely they are a contractor because they have put out a shingle. On the other hand, an in-home nanny is an employee and should be treated as such without solid counsel, even in cases of nanny shares, because their time is controlled by the family hiring.

33055

Mon, May 04 2015, 4:10 pm

SRS wrote:

You were wrong when you stated about cleaning ladies

SRS wrote:

If you hire them for your own personal purposes, you don't have responsibility for their tax payments.

You are back pedaling now without admitting you were wrong.

The IRS test in form 926 determines whether or not a person is an employee.

IRS wrote:

Do You Have a Household Employee?

You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also does not matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.

Example.

You pay Betty Shore to babysit your child and do light housework 4 days a week in your home. Betty follows your specific instructions about household and child care duties. You provide the household equipment and supplies that Betty needs to do her work. Betty is your household employee.

I don't know anyone but myself who does not provide instructions especially initially to the household help in my neighborhood. Most people will say to their help, clean the kitchen for instance and they will stand there making sure meat and milk are not co-mingled. They will say lightly starch these shirts. Linens are changed on Thursday. It is only when someone is hands off that they are contractors rather than where they are hired from. It is not a matter of the cleaning help refusing to wash windows, do heavy work, watch kids or run errands. It is a matter that you will instruct them on what and how the work is done. It is not a question of micromanaging them and there is no uniform test. It is not a matter of who sets the hours either.

Other than myself, I personally know of only one other situation where the person actually hires a contractor that meets the IRS standards. They hire a service to clean the house top to bottom. The homeowner has no say so in the supplies or the manner the work is done. The owner of the firm comes in and supervises whether the soap dish is clean enough for instance.

Anyway you proved my point up thread that usually laws are complicated so that people unknowingly break them. If someone relied on your advice today, they would inadvertently be breaking the tax code.