[PLEASE HELP] Question about 1099 vs under the table

[TheGR8TESTOAT]

Question about 1099 vs under the table.

So I've been doing a bunch of consulting gigs mostly business development. I report honestly how much I got paid per project and my over all compensation because I don't want any drama or loose ends with Uncle Sam.

So on that front I'm good. But a friend of mine owns his own head hunter/recruiter firm. The guys shady as all hell and is always fronting. But he basically is telling me that if I help bring him business on both or either ends he'll cut me a finders fee.

So basically he's saying like if I help find him the right guys for these big companies and vice versa he'll cut me that commission which is like 10% of that person's first year salary. He says he will even pay under the table if I want as in he'll just go to his business bank and pull out the cash to me. I guess my question is that legal? or would I get screwed in the long run if I found him a ton of business and he kept giving me all these commissions in cash under the table?

He's coming at me since he knows I'm always at the big business events doing the BD work anyway for the companies I do consulting for.

One of our common friends is saying it should be good as long as we both on the same page. Like we both calling it 1099 or we both calling it under the table. Another friend says he would be the one who got screwed if anything since he's the one removing the cash from his account meaning theres only records of him moving cash.

Thing is my lady is friends with a bunch of technical recruiters and HR executives so this would be easy work for me if I were to pursue it. But just not sure about the taxes of it all. What do you all think?

[BostonGuy]

To answer your question, if the guy pays you with cash, check, bitcoin or whatever, and you don't declare the income on your 1040 then you're understating your income and tax liability - and of course it's illegal.

Also, if you're receiving large amounts of $$$ and depositing into your bank, then there is an audit trail of the transactions. If you're audited by the Service, they typically will look at all bank, loan and other financial accounts.

Why not just report the commissions like with your other income? The transactions you described are not insignificant amounts and if your friend is "shady as hell" then who's the say he doesn't honor an agreement with you, especially if there's nothing written, cash received with no record, etc.

If I was your accountant, I would tell you it's not worth the business and audit risk to accept under-the-table payments. Accept a check and 1099 if issued. Also, regardless of if you received a 1099 or not, you have to report the income. The tax savings (of not reporting the income) and the business risk (of him not honoring an agreement and paying you your commission) is just not worth the risk.

[TheGR8TESTOAT]

To answer your question, if the guy pays you with cash, check, bitcoin or whatever, and you don't declare the income on your 1040 then you're understating your income and tax liability - and of course it's illegal.

Also, if you're receiving large amounts of $$$ and depositing into your bank, then there is an audit trail of the transactions. If you're audited by the Service, they typically will look at all bank, loan and other financial accounts.

Why not just report the commissions like with your other income? The transactions you described are not insignificant amounts and if your friend is "shady as hell" then who's the say he doesn't honor an agreement with you, especially if there's nothing written, cash received with no record, etc.

If I was your accountant, I would tell you it's not worth the business and audit risk to accept under-the-table payments. Accept a check and 1099 if issued. Also, regardless of if you received a 1099 or not, you have to report the income. The tax savings (of not reporting the income) and the business risk (of him not honoring an agreement and paying you your commission) is just not worth the risk.

You must spread some Reputation around before giving it to BostonGuy again.

Yeah the guys shady in the sense that he's your typical fake LA d-bag who brags about his finances and materialistic things and all the women he supposedly sleeps with even though we never seen him with any women ever LOL.

So basically he wanted me to find new accounts for him from both ends the candidates and the companies looking for them and he said he'd let me have the entire 10% commission since his company benefits from having new accounts more so in the long run.

But yeah my concern was the cash commission vs 1099. Also if I did 1099 and he didn't report on his end would he get in trouble? Because I don't see how I would get in trouble since I'm the one reporting everything straight up right?

It would be easy since we are friends with bunch of other headhunters and technical recruiters so we'd basically take their top clients and refer them to him to sign up so it wouldn't be hard at all for that easy extra cash. the only bad thing would be again the formalities when april came around again.

[HAMMER77777]

To answer your question, if the guy pays you with cash, check, bitcoin or whatever, and you don't declare the income on your 1040 then you're understating your income and tax liability - and of course it's illegal.

Also, if you're receiving large amounts of $$$ and depositing into your bank, then there is an audit trail of the transactions. If you're audited by the Service, they typically will look at all bank, loan and other financial accounts.

Why not just report the commissions like with your other income? The transactions you described are not insignificant amounts and if your friend is "shady as hell" then who's the say he doesn't honor an agreement with you, especially if there's nothing written, cash received with no record, etc.

If I was your accountant, I would tell you it's not worth the business and audit risk to accept under-the-table payments. Accept a check and 1099 if issued. Also, regardless of if you received a 1099 or not, you have to report the income. The tax savings (of not reporting the income) and the business risk (of him not honoring an agreement and paying you your commission) is just not worth the risk.

I've worked off the books before. Don't deposit Anything. Keep your Loot as Cash. Need a safe place. Get a safe deposit box at the bank. Buy everything in Cash. Shopping online? Use Those Prepaid Visa Gift Cards. Stay off the grid.

[TheGR8TESTOAT]

I've worked off the books before. Don't deposit Anything. Keep your Loot as Cash. Need a safe place. Get a safe deposit box at the bank. Buy everything in Cash. Shopping online? Use Those Prepaid Visa Gift Cards. Stay off the grid.

i don't mind depositing and reporting everything straight up. i guess my question is what if i report everything straight up but he doesn't? it seems like if anything he'd be in trouble not me right?

[BostonGuy]

You must spread some Reputation around before giving it to BostonGuy again.

Yeah the guys shady in the sense that he's your typical fake LA d-bag who brags about his finances and materialistic things and all the women he supposedly sleeps with even though we never seen him with any women ever LOL.

So basically he wanted me to find new accounts for him from both ends the candidates and the companies looking for them and he said he'd let me have the entire 10% commission since his company benefits from having new accounts more so in the long run.

But yeah my concern was the cash commission vs 1099. Also if I did 1099 and he didn't report on his end would he get in trouble? Because I don't see how I would get in trouble since I'm the one reporting everything straight up right?

It would be easy since we are friends with bunch of other headhunters and technical recruiters so we'd basically take their top clients and refer them to him to sign up so it wouldn't be hard at all for that easy extra cash. the only bad thing would be again the formalities when april came around again.

You have no requirement to obtain a 1099; if he pays you cash then you report the cash on your return. You will show "commissions income" or something to that affect on your Schedule C and there won't be trail to him. As long as you report the income you would not be afoul of the law. And the less you know about his shady business dealings, the better.

The thing that concerns me is: this guy, as you describe him, is a shyster and bull****ter. If he's running business off the books then he's probably not writing up contracts and agreements with his recruiters. If he promises you a 10% commission, but there's no written agreement, then who's to say he doesn't try to stiff you. A verbal contract is legal but very hard to enforce. If you're doing business with him make sure you get something in writing.

[HAMMER77777]

i don't mind depositing and reporting everything straight up. i guess my question is what if i report everything straight up but he doesn't? it seems like if anything he'd be in trouble not me right?

Ya, I think so. The reason I worked off the books way back when, though was to avoid Paying Taxes.

[TheGR8TESTOAT]

You have no requirement to obtain a 1099; if he pays you cash then you report the cash on your return. You will show "commissions income" or something to that affect on your Schedule C and there won't be trail to him. As long as you report the income you would not be afoul of the law. And the less you know about his shady business dealings, the better.

The thing that concerns me is: this guy, as you describe him, is a shyster and bull****ter. If he's running business off the books then he's probably not writing up contracts and agreements with his recruiters. If he promises you a 10% commission, but there's no written agreement, then who's to say he doesn't try to stiff you. A verbal contract is legal but very hard to enforce. If you're doing business with him make sure you get something in writing.

LOL well appreciate the advice. without getting into a long story ill just say he's a former lawyer. he passed the bar exam, i don't know how but he did and he couldn't find work as a lawyer or according to him he did but he had a bad break up with his ex-fiance so thats why he stopped doing law and now does the head hunter business. this is what I'm talking about bro even that personal life story sounds fake to me or at least suspect right?

so hes shady in that sense that he's very insecure and feels he has to lie in order not to appear as a loser which is how like 90% of LA people are. they just inflate or exaggerate whats really real with them.

but when it comes to business and work he's all strict thats why he claims its all on the up and up if we do cash commissions and not having to fill out the 1099. the thing is he said we either fill it out and both be on the same page or we don't fill it out and we both just do it as cash.

another thing is i think he'd see my social security if i did fill out a 1099 right?

[BostonGuy]

LOL well appreciate the advice. without getting into a long story ill just say he's a former lawyer. he passed the bar exam, i don't know how but he did and he couldn't find work as a lawyer or according to him he did but he had a bad break up with his ex-fiance so thats why he stopped doing law and now does the head hunter business. this is what I'm talking about bro even that personal life story sounds fake to me or at least suspect right?

so hes shady in that sense that he's very insecure and feels he has to lie in order not to appear as a loser which is how like 90% of LA people are. they just inflate or exaggerate whats really real with them.

but when it comes to business and work he's all strict thats why he claims its all on the up and up if we do cash commissions and not having to fill out the 1099. the thing is he said we either fill it out and both be on the same page or we don't fill it out and we both just do it as cash.

another thing is i think he'd see my social security if i did fill out a 1099 right?

Your friend sounds like this guy



If you don't have an EIN (employer identification number) then you will have to provide your SSN to him. If you're self employed then you can easily obtain an EIN on the IRS website:

https://www.irs.gov/businesses/small...ber-ein-online

[TheGR8TESTOAT]

Your friend sounds like this guy



If you don't have an EIN (employer identification number) then you will have to provide your SSN to him. If you're self employed then you can easily obtain an EIN on the IRS website:

https://www.irs.gov/businesses/small...ber-ein-online

Thanks bro I do have a EIN for my business development consulting projects and gigs. But I'm assuming I can't give him my EIN for his Headhunting consulting right? Or can i?

You are right about how he reminds you of Slipping Jimmy the guys worse than Slipping Jimmy since he couldn't even land work as a lawyer lol. Word is he tried to work as a corporate lawyer none of the companies would hire him, so he tried to work as a HR manager none would hire him. So he became a substitute teacher and got fired from that, he was trying to date the other teachers and they complained about him.

So then he started the headhunter business, saying hey I'm a lawyer so I know all of your rights as an employee and such. So thats his whole angle now LOL.

He said he paid out 80K in referrals finder fees bonuses last year. Again I take everything with a grain of salt with him.