Legal Question in Tax Law in California

Re: Former Employer Threatens to Sue Me If I File Amended Tax Return

1. It depends on what the language of the agreement.

2. Your attorney should be able to assist you with this.

JOEL SELIK

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Re: Former Employer Threatens to Sue Me If I File Amended Tax Return

Neither you or the employer can make an agreement that circumvents the tax laws. If that were the case, everyone would do so.

If your agreement says that this amount includes any income taxes that were required to be paid, the employer could argue that this is a case of an employee who claimed that no income tax deductions were required.

This would not eliminate the employer's duty to pay Unemployment tax and his share of the Medicare and Social Security taxes. If the IRS goes in to audit the employer and his employment tax records, two things will happen.

1. They will assess the correct tax on him, whether or not you file an amended return.

2. The IRS will assess a corrected return for you, too (unless it results in you paying a lower tax, in which case they won't do anything).

When you say that the IRS ruled that you were an employee and not a contractor, how did that happen? During an audit of your taxes or theirs.

I doubt if the employer, absent any definitive wording in the settlement agreement, could have any basis for a lawsuit against you for your filing a tax return that conforms with the IRS determination.