[annanina]

Hello,

I have seen posts from employees having similar trouble, particularly this guy here:
https://www.askmehelpdesk.com/taxes/...h1b-57146.html

I am in the same situation, working for the past 4 years in a small business that uses payroll:

- Have been on an internship visa J1 until September 2006

- Switched to H1-B in October 2006 (full-time employer), had no clue about what taxes have to be deducted and what not, and therefore never noticed FICA are not withheld.

- Received a pay raise in January 2009 and noticed taxes withheld (medicare and social security) that haven't been on my pay stub before

- Did research, told/asked my employer, who claimed he noticed that too, and that must have been some miscommunication with him and payroll. He said he told payroll that my visa status changed on the phone (sounds shady already), and if we wanted to settle this officially = officially paying back the taxes, they would have no proof that they communicated this to payroll and they would most likely have to pay exuberant penalties.

The amount for the 27 months (October 2006–December 2008) not paid to medicare and social security is exactly $9500 (including my 50% share).

My employer then told me he asked some legal advisor who said the overall amount to be paid is likely around $20.000, with all fines and penalties.

He then offered me to settle this under the table, and kind of refuses to settle this officially. If I were to quit this job I wouldn't care, but as a H1-B visa holder I kind of depend on this job (I do not want under any circumstances go back to my home country!! ).

I am now deciding on whether I insist on having this settled officially, and probably don't get my visa paid that needs to be extended this fall OR come up with a sum, probably around $5000 or so, and "forget" about all this...

Any advice on what to do? It's not only about the money, but also about if I will receive less retirement because I paid 2 years less into the system.

I assume probably nobody here will agree to just get paid under the table, but if I were to, and social security comes to me in 10 years, shouldn't it still be my employer who would be responsible to deal with the mess? What risks do I have to agree to this?

I feel bribed, and on the same time dependent.

I would also like to talk to a professional, but whom would I talk to?

A tax laywer?
A financial advisor?
A retirement specialist?

PLEASE HELP!! I am lost :-(

[MukatA]

Did you receive W2 or 1099-misc for your wages during 2006, 2007 and 2008 while on H1-B? If you received W2 for 2006, you should have noticed that the employer did not change your status from F1 to H1-B.

Did you file your tax returns for 2006 and 2007? If yes, how did you report the income?

[AtlantaTaxExpert]

Contact an immigration attorney who has links to an international tax consultant, and find out your options.

If you push to settle this, you WILL lose your job, because it is clear to me that the employer would rather NOT deal with the problems associated with an obvious error on the part of the payroll company.

[annanina]

Hello,

First, thanks for your replies and reading my little essay...

I did receive a W2 throughout the whole time, even as an intern. But the W2 does not reflect the visa status. I always did my taxes on time and reported everything from my W2. As I said, I seriously didn't know what kind of taxes had to be on there or not. I could almost bet there are 100.000s of other employees who are not really aware of their taxes? Well at least I wasn't–

@AtlantaTaxExpert:

You mean if I push to settle this officially/legally, then I will loose my job? Can you give ANY rough estimate on how much the overall amount to be paid might be? As I said, the amount of FICA taxes not paid is $9500 all together, period not paid is October 2006–December 2008.

You suggest to contact an immigration lawyer/international tax attorney. I am not quite sure this falls under the immigration category rather then solely in the tax category?

The fact that I would have to leave the country within 30 days if they fire me is another story and there is nothing I or a lawyer could change, except I'd find another job in 30 days...

Thanks guys!!

[AtlantaTaxExpert]

AnnaNina:

You have no legal or financial liability on this issue, because FICA taxes MUST be collected and paid by the employer.

However, correcting this problem WILL cost the employer upwards to $20,000, which is why he does not want to deal with it. I have advised clients on similar issues in the past, and those who "did the right thing" almost always ended up being terminated, because their insistence on obeying the law cost their employers massive fines from the IRS for failing to properly research the law when it came to withholding the required FICA taxes.

That is the reason I suggested getting proper legal advice.