If you didn't get here from 'The Criminal Rites Of Spring', click on the title and read that first
It's Not Too Late To Do The Right Thing
A month-long orgy of corruption has just ended, during which the owners and officers of companies across America issued millions of fraudulent affidavits about people to whom they had made payments over the past year. By way of "W-2s" and "1099's", the affiants furnished sworn testimony to the government that these payments were "wages as defined in 26 USC 3401(a), and 3121(a)" or payments made in the course of their "trade or business"-- without ever having even looked at how 26 USC 3401(a) and 3121(a) define "wages", or at the specialized legal meaning of "trade or business"! Thanks to these lies, the vast majority of those about whom the affidavits were created will be victimized by a sustained effort to seize huge amounts of their wealth for taxes that they simply do not owe.
Although it is easy to understand the wholesale surrender of these affiants to the most feared agency in America's demand to, "Do what you're told, and don't ask questions!", what was done should not have been, and much ill will result. Some victims of this corruption will consequently not have the money that could have paid for health insurance for themselves and their loved ones. Some will be forced to forego educational advancement, or re-training opportunities. Some will have to choose between necessities and doing something nice for their kids, when they otherwise would not have had to. Some will end up ruined or in prison-- in part, at least, thanks to the false testimony on these "W-2" and "1099" affidavits. It is true that those who understand the details of the law can overcome the individualized ill effects of false testimony-- but even if every individual target of false testimony corrects the record and secures proper treatment under the law for himself or herself, the widespread, institutionalized abandonment of the rule of law involved in this degenerate regime is profoundly harmful to America as a whole.
In 'The Criminal Rites Of Spring', I proposed a solution for those with enough integrity to view the situation as a dilemma: Take the relevant information to those demanding the affidavits (the IRS), and let THEM take responsibility for swearing that the payments made are of the specialized character for which W-2s and 1099s are appropriate. My guess is that few took that suggestion, and no surprise. After all, to do so required literally stepping into the scorpion's nest. However, I now propose another solution, and one which might be more within the comfort zone of many who want to do the right thing, but are not yet ready to just say, "No, I won't testify at all to what I don't know to be true." The compromise solution? Go ahead and testify, but only to what you DO know to be true.
Now, when I say "you" in what follows, I don't mean YOU, because I don't know anything about the circumstances and legal status of anyone reading this, and in any event each person must choose his or her own course. But for those interested, here's the sort of thing I'm thinking of...
At the end of the year, your accountant, or HR staff, or someone, presented you with figures relating to everyone to whom you or your company has paid money. The IRS wants you to transfer that information to forms it provides, and swear to the accuracy of both the amounts AND their legal character. For instance, the IRS wants you to record the total amount of money paid to each of your workers on the line marked "Wages,..." on a W-2. However, by law, the only thing to be listed on that part of a W-2 is "wages as defined by 3401(a) or 3121(a)". Not "earnings", not "money"-- just "wages as defined by 3401(a) or 3121(a)". Thus anything listed as "wages" on such a form is being declared to be the thing so defined.
Now, the IRS represents to you (without ever saying so explicitly) that all money paid to any worker IS "wages" -- in other words, that the earnings of all workers in America are automatically and universally of the specific legal character suited to a W-2. However, simple logic says that if this were so, that specification of "wages as defined by 3401(a) or 3121(a)" wouldn't be there. Instead, the law would just say "all money paid", or something to that effect. Because the law DOES say the one thing and not the other, they can't be the same.
So, while you CAN attest to the amount of money you paid out, you probably can't honestly put the figures on a W-2 and swear to the legal propriety of having done so. And you know what? There's no reason why you should have to!
IF what the IRS asserts is true-- if your worker's earnings automatically ARE "wages", and your testimony as to their character is therefore legally meaningless-- then simply attesting to the amount paid meets all the legitimate reporting needs of the IRS! That is, if what the IRS wants you to believe about all such payments is actually true, then to attest to the payment of "x" dollars, even without doing so on a W-2 (and therefore also making a declaration as to the legal character of the payment), has exactly the same legal effect and utility as putting the figure on a W-2 would! The only difference (if what the IRS wants you to believe about all such payments is actually true) is that if you put the figure on a W-2, you are personally responsible-- legally and morally-- for the implicit testimony that what you paid really is "wages as defined by 3401(a) or 3121(a)"; and when you only testify as to the amount of money paid, you are not.
The solution to the dilemma should now be obvious: The execution and submittal of a generic affidavit attesting only to the amount of money paid to each worker, and the amounts withheld. It's as easy as that! You attest to only what you know to be true, and if "money paid" REALLY IS the same as "wages", then the IRS should be happy, too! (And if "money paid" really ISN'T the same as "wages", then you've spared yourself committing a grave legal and moral offense.)
A generic affidavit being used in lieu of a W-2 would contain all the routine identifying information for the company and the worker (while avoiding the use of custom-defined legal terms such as "employer" and "employee"); and would list the amount of money paid "per agreement" (the total paid in fixed hourly or weekly increments). It would also list the amounts withheld and turned over to any government for crediting against any tax liability for which the worker might prove to be responsible, of course. The final touch would be a declaration to the effect of, "The reporting of these payments is not to be taken as a statement regarding their legal character."
Those who have paid outside contractors, and are urged to execute "1099s", could apply the same concept to that dilemma. Generic affidavits, listing to whom and from whom, and the amount paid (along with a disclaimer as to the mere act of reporting, as above), should answer everyone's needs. If all such payments are-- automatically and objectively-- "trade or business" related, and have the legal consequences of being so whether you attest to that status or not, then the IRS has everything it needs to do its thing once you have sworn to having paid the money. If all such payments ARE NOT automatically and objectively "trade or business" related, then you have no business listing them on a form exclusively intended for that variety and swearing under penalty of perjury that to have done so is proper.
I began these comments with the observation that our month-long annual national orgy of corruption had just ended. And indeed, the period within which all "information returns" such as W-2s and 1099s are to be submitted to the federal and state governments-- and to those about whom they testify-- is passed. But it's not too late to rectify having done the wrong thing. There are standard procedures for correcting information returns. To replace those containing illegitimate declarations with correcting forms upon which only known information is listed, followed by the issuing of generic affidavits of the sort discussed here, would serve, in my opinion.
Doing the right thing can be hard sometimes. What we are talking about in this discussion, though, is doing the right thing by simply NOT doing the wrong thing-- and that is not hard at all. No one can be ordered to testify in any particular way, and no adverse consequence can attend honest testimony, even if honesty frustrates the desires of the powerful. So, tell the truth, the whole truth, and nothing but the truth. The only thing at stake is your own self-respect.