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OK, even if I do get caught, how
bad can it be? Worse than you can imagine.
Because you must report household employment
taxes on your personal federal tax return, failure to pay the
appropriate taxes constitutes federal tax
fraud. Those three little words subject you to the
following consequences:
- Payment of all back taxes,
penalties and
interest.
- Federal charges
of fraud and tax
evasion.
- Civil and criminal penalties, including
fines, potential
imprisonment, and a criminal
record. Think we're exaggerating? Here's the law.
- Ruining your reputation and
career, especially if you're an attorney,
accountant, financial advisor, or any professional who trades
on integrity. Being labeled a "tax cheat" isn't good for anyone's
business.
- If you're a California attorney, Business & Professions Code §6068(o)(4)
requires that if you're even charged with a felony
such as tax fraud, you must report the charge to the state
bar, potentially jeopardizing your ability to practice and
earn a living.
- Oh, and by the way, if you advise your nanny not to pay her
own taxes, that results in additional charges of
fraud and conspiracy, with
penalties of up to three to five years, respectively, as well as
fines of up to $250,000.
Remember: There is no statute of
limitations for failure to report and pay
federal employment taxes.
In addition to these penalties, you undoubtedly will pay
significantly more in professional fees to
lawyers and accountants defending yourself in an audit or criminal
prosecution than you ever would have spent paying your nanny
legally.
Want an example of this debacle? Read about what happened to Bernard Kerik, President Bush's nominee for
Secretary of Homeland Security, and the consequences of his
"Nannygate" problem.
Instead of agonizing over civil
and criminal penalties, check out all the advantages of hiring
legally.
Let Legally
Nanny® take the worry and hassle out of your
life so you can enjoy your family and do it all with the peace
of mind that it's done legally. Contact us for a free consultation
today!
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