Pre-School not doing payroll or giving paychecks

So my wife has been working at a pre-school/early childhood develop... since this spring.  She had been just depositing paychecks into her account until we recently went to one account and it came to my attention that she was just getting a check written by one of the business owners and not an actual payroll check with a paystub and stated rate/hours.  After asking her a few other questions it came to light that this business owner had never run a background check (which I believe is required to work in pretty much any capacity with children in New York), had her fill out a W-4 or an I-9.

I'm trying to figure out what to do.  After having some conversations with other employees (there's only one other teacher that has been there longer) the business owner hasn't filled out any of the proper paper work for any of the current employees but the one person that had worked there previously has stated that at some point in the past the business owner used to do a proper payroll/background check.  So it seems pretty obvious that the is purposely committing tax fraud/evasion and I believe that under New York whistleblower laws we can turn in this business owner without getting my wife in trouble.  I have two concerns in that 1) this business owner is running a school and not doing proper background checks on her employees 2)I don't want the income that has not had proper withholding by the employer to come back and bit myself and my wife in the butt when we file this year.

Suggestions?

My personal guess is that if whistle is blown, your wife gets fired  and business operator get 3 lashes with a wet noodle.  Uless thepreschool operator is a convicted child abuser or something else that makes the press I'd not hold my breath waiting for any enforcement agencies to step up to plate.

I'm NOT sayng is right to work off the book or apy off the books or run some sort of child care w/o appropriate cheks and licenses ---but   to some degree pre school is a bit of a sacred cow employer of women with few other work options.  I once blew the whistle on an off the books  day care operator  near me--it was a bit of shoot the messenger!

If your wife has received income this year without having any taxes taken out then she will need to pay the taxes on the income she has earned. You probably need to talk with a tax professional to make sure she pays the right amount of taxes.

Personally I would look for a job elsewhere and contact the DOL to see what regulations are in place for this kind of business. She may not have to give her real name.

Any thoughts on turning the business into the IRS for tax evasion?  It seems pretty clear cut that the business is breaking the law.  My wife isn't really worried about the job anymore because the business owner has made the workplace very inhospitable.

sapsparky:

Any thoughts on turning the business into the IRS for tax evasion?

Are you sure the business is not paying their taxes?

Your wife may be the one that has to worry if she does not pay taxes on her income.

The one acquaintance I had who was employed by such an off the books  care provider found that upon being fired the employer was not part of the system and initially her UC was denied--but upon pressing the point she was entitled to collect and the state proceeded against the employer.  I say this in context of do NOT quit if you expect to qualify for UC--hang in there long enough with no whistleblowing  to work long enough to qualify.

If wife wants to make noises and blow whistles --then do so after she has been there long enough to qualify for UC.

Whether or not your employer gives you a W-2 you need to pay the state and Feds the proper income taxes due and that means any estimated taxes as well unless you otherwise fall into a safe harbor.   If you are trying to stretch out the date of noise making consider filing for a extension of filing your tax return.

I do not know the mechanics of what happens if employer messes it up but I suspect you still owe all taxes that employee would pay on income but that employer bears problem to make up the gaps as to stuff employer must pay. EG you pay your share of SS as an employee--not the higher rate as an IC.

In theory I think there is a small reward to turn in a federal tax cheat and provide usefull information to support same---but I'd not assume its a big reward........or that it would result in major pain to violator.

DO NOT engage in threats of pay me or I will turn in your illegal conduct to law enforcement--such a threat can become a form of extortion--and backfire!