Reply to Does anyone ever actually get caught paying a nanny under the table?

Forum Index » Employer Issues

Reply to "Does anyone ever actually get caught paying a nanny under the table?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]My husband and I are legal when paying our nanny (a US citizen) - we pay and report taxes.  However, three of our friends that have nannies pay them under the table and have no concerns about getting caught.  One friend specifically said that her nanny wouldn't work for her otherwise because she wouldn't make enough money.

On one hand, I feel bad that our nanny's $19/hour salary (for 2 kids) turns into like $12-13/hour after taxes, meanwhile our friends' nannies pocket $18/hour and don't report.  BUT on the other hand I would not want to get caught as we are govt employees.  What would be the penalty?

Have you ever known anyone in real life to get caught doing this?  It seems like everyone gets away with it.  How can you lose $30+K per year (nanny salary) and not get audited by the IRS??[/quote]

OP, the penalties are the failure to deposit the employment taxes plus the failure to pay the taxes when they were due plus the failure to file the returns showing the taxes.  So the penalties are over 50% of the tax liability, plus you'd owe interest.  I used to work for the Department of Justice Tax Division and I can assure you this issue came up, and not with famous people.  The reason you might have only heard about it with famous people is because no one wants to read a story about some random family in Oklahoma, but that doesn't mean it doesn't happen.  Your nanny gets benefits beyond just the cash, as others noted.  She has a salary and tax return history (which is important if she ever wants to a car or a house), and she is eligible for social security benefits.  Also, if you and your husband are government employees, then know that one case I had involved a DOJ employee where this happened and she was fired.  Security clearances or even the public trust level generally will not allow you to do something like this, so if you're caught, you're fired.  Does everyone get caught?  Obviously not, so I guess people just weigh the risk of being caught (small, given the amount of people who do this) against the effect of being caught (potentially huge).  If they're in a job where they wouldn't get fired, then maybe they're willing to roll the dice on having to pay the penalties and interest.  [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics