It’s common for Chicago rental services to report their leasing agents as independent contractors for tax purposes, but control their day-to-day activities to the extent that they should have been classified as employees. The rental service recruiting ad, above, only hints at the high degree of control that rental services often exercise over how leasing agents perform their duties. The firm’s name has been redacted.
The Internal Revenue Service offered this simplified explanation of the issue in a warning about questionable employment tax practices, which include misclassifying employees as independent contractors and failing to withhold taxes and pay Social Security, Medicare and unemployment taxes:
Sometimes employers incorrectly treat employees as independent contractors to avoid paying employment taxes. Generally if the payer has the right to control what work will be done and how it will be done, the worker is an employee.
If you have solid information that your current or former rental service misclassified leasing agents as independent contractors, you might reap a very substantial reward by reporting it to the IRS Whistleblower Office.
The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.
A single whistleblower collected a $104 million award last year.
Your current or former rental service is unlikely to appreciate the irony of seeing the lucrative career it promised but failed to deliver realized in this fashion, but you will. As a bonus, you might get to see your current or former employer hauled away in handcuffs.
If you need help in preparing or documenting your whistleblower submission, it ought to be easy to find a hungry young attorney or CPA who will assist you on a contingent fee basis in exchange for a piece of your action.