[patilaniket]

Hi there,

I started with my employer Oct 05. I got my H1-B on Dec 05. Now for those few months before Dec 05 I was on my OPT and so I called my payroll dept and asked them not to deduct my FICA taxes. But after I got H1 I called them again and said that now you should start withelding my FICA taxes. But they said that they need my stamped Visa to do that. I told them that I don't have my visa but I do have a 797 which is the proof of my H1-B. They said they will look into that stuff, never got back to me. I filed the taxes for 2005 with no FICA taxes. Now last December 06 I went back to my home country and got my H1-B visa stamped and after I came back sent the visa to my payroll dept. Now they have started withelding my FICA taxes but I didn't pay the taxes for whole 2006 year. Now I am in tention. Am I in a big trouble? I can still pay the taxes but now that's a hugh number like 5000$ which I don't have right now. I also asked my employer if they can do some adjustment in my W2 for last year but they didn't do anything.
So what should I do now.

Please advice me.

Thanks.
Nick

[AtlantaTaxExpert]

Nick:

YOU are not in trouble.

Your employer? That's another story.

The IRS holds the employer responsible for payment of FICA taxes. As long as you notified the employer of your impending visa change, and notified them when your H-1 visa become effective, you have met your legal requirement.

Now, once your employer figures out how badly they screwed up, they may come back to you and start trying to collect the back taxes from Dec 2005 and all of 2006. Note that they have no longer have ANY LEGAL STANDING to collect these back taxes.

Of course, if you refuse, you will probably get fired, but $5,000 is a significant sum of money, and you can always get another job! It's your choice!

It looks like your employer is trying to ignore the problem in hope that the IRS will not notice. If the IRS does notice, YOU will not be held responsible by them. Do not lose any sleep over it!