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Asad Rahman
Asad Rahman, Attorney
Category: Business Law
Satisfied Customers: 1515
Experience:  Practicing Attorney with 10 years experience
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I was a contract (but we did not have a contract in place)

Customer Question

I was a contract (but we did not have a contract in place) for a small business for 14 years. I had moved out of town, and I continued to prepare their payroll, financials from another town. They always had a 2nd bookkeeper at the business that did payables, deposits, etc. For the past several years, cash flow became an issue. It is an S-corp. A CPA firm prepared all tax returns, but I did payroll, payroll tax reports, etc. The owner quit taking a paycheck the cash flow was so dire for several years. In 2013 her co-owner and spouse had her taking amounts, which he directed me (because he was applying for a loan) to put into payroll, causing payroll taxes due the following month. Because of the cash flow issues, I paid the payroll taxes late. Same think happened in 2014, causing penalties in 2015. Late notices were received by the owner, and he would fax to me. I tried my best to keep up, but I admit I grew very weary of all of it. I should have quit, but instead I quit paying them altogether for the 2nd quarter of 2015. They received yet another notice, this time firing me. I felt horrible, have tried apologizing time after time, that part was my fault. Now they have sent me 4 or 5 threatening letters demanding (first $50K, now $19K). I offered to pay the penalties for the 2nd quarter of 2015, and they are now hounding me for more and threatening lawsuits and jail. The owner's husband loves to sue people. Anyway, I can't take it anymore. My husband recently lost his job, and is 60 years old. I am 59. The owner's husband keeps digging into the books and accusing me of "diverting" funds, which is his words for saying I miscoded and therefore stole. I am at the end of my rope. Please help!
Submitted: 6 months ago.
Category: Business Law
Expert:  Asad Rahman replied 6 months ago.
I am really sorry to hear this. You may want to consider going on the offensive by hiring an attorney to pursue possible claims against them such as a hostile work environment, harassment, nonpayment of funds. This might force their hand and get them to settle with you. My concern for you is that a judge would likely award the damages to them caused by your failure to file so any typenof settlement where they forever release you of all future claims is optimal.
Customer: replied 6 months ago.
I paid $3000 for the penalties for the 2nd quarter mentioned. They are demanding $12k more for penalties over 18 mos, which he even knew about. And $5k for coding errors! At any time as an owner he could have written a check to pay for the previous penalties since he opened all mail. He is asking about coding of inventory etc all the way back two 2002! And each year a CPA prepared the tax returns which he approved. They also have two out of state partners. Then they started a 2nd business and co-mingled funds which the other partners have no ownership in. The owner has a 2nd home, rents it by VRBO, and runs payments for this home thru the business. Which is also not owned by the business, but them personally, not including the other partners.
Customer: replied 6 months ago.
See above.
Expert:  Asad Rahman replied 6 months ago.
I understand. Then file the claims against him and put him on the defensive. He probably seea you as an easy target.