Hello! I been working for my father's plumbing company for 2 years and he doesn't withhold taxes out of our pay checks. He said the last time he withheld wages was in 1996 but I been working for him since 2009. A lot of people would say that would consider us independent contractors but neither one of us have a business license or a contractor license in our name. Recently a guy was fired from the company and he called the labor board on my dad because my dad has not been withholding taxes, he has not been paying prevailing wages on government projects, nor does he pay overtime. My dad has my name on the business account just in case when he's out of town I can write the guys their pay checks. My question is since my name is on the business account(strictly the business account and nothing else meaning I have never signed any contracts) will the labor people and IRS hold me responsible for his wrong doing? Meaning by having my name on the account will they consider me a business owner? I know that I need to start paying my own taxes but I don't want to punished for my dad's bad business dealings when in all reality I'm just his son/employee who name happens to be on the business account.
1 Answer from Attorneys
As a Franchise Attorney I can say the answer is very likely no. The IRS and state taxing authorities typically look to the actual business owner(s), not to those on the signature account at the bank. But, as the saying goes, you never know. Your Dad was playing with fire all these years and now he will have to face the music. I'd recommend getting yourself removed from the signature account and anything else with your name on it. Better to be safe than sorry. Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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