No social security numbers

[oceanlovin'ea]

I have been doing payroll for a couple of motels this past year. They have had many employees (mostly in the beginning of the time I started doing the payroll) that worked a few days or weeks and left without ever giving their social security numbers to the owner.

I now have to do W-2's for these people. What do I do with no social security numbers to put on these W-2's?

I have given them a list and told them to find as many of these numbers as they can, however they can.

Also, give me a reference please that I can give to her to show her how important it is that she get the social security number before they start to work, please.

Thanks.

Linda F

[BOB W]

Linda....

.... it is hard to answer your question. It is pure logic, W-4 and I-9 forms are required to be completed before an employee start working. The I-9 form is your primary clue, "the right to work in the US". An employee can't be hired without the employer knowing that they are eligible to work in the US, maybe that is your answer.

You said that you do the payroll for this client. If that means you process payroll checks, then you should refuse to generate the check without the required info. Many states require state notification when an employee is hired, yours probably does also.

Another good reason is the disallowance of the deduction as wages and it is taken as a withdrawal or net profit distribution. At least Uncle Sam will get some income taxes on this employee scam and employer gets a non-deductible GIFT.

[sea-tax]

linda my policy for my clients is to get a w-4 and I-9 before I do payroll I also ask to see copies of social security cards and driver's licenses or passports. You can tell the employer that you will not process payroll without these things and he should tell the employees they won't get paid until they produce these docs. Also I think there is a $50 dollar penalty per wrong social security # assesed to the employer so it is in their best interest to verify.

To solve your problem I had a similar issue from a new client that went to another accountant. And one or two employees had no social security numbers and only worked for one day . I issued the w-2's with all zero's for the social security number. This was two years ago and I have heard nothing since. I am not saying that this was the right thing but under the circumstances I had no other choice.

[Larmil]

.... it is hard to answer your question. It is pure logic, W-4 and I-9 forms are required to be completed before an employee start working. The I-9 form is your primary clue, "the right to work in the US". An employee can't be hired without the employer knowing that they are eligible to work in the US, maybe that is your answer.

You said that you do the payroll for this client. If that means you process payroll checks, then you should refuse to generate the check without the required info. Many states require state notification when an employee is hired, yours probably does also.

We require our payroll clients to have W-4, I-9, and MO W-4 prior to cutting a paycheck. Missouri is one of the states you mention. They require a copy of the MO W-4 be sent to the state..

[Black Bart]

Obsession about paperwork

...payroll for a couple of motels...many employees...worked a few days...left without ever giving their social security numbers to the owner...What do I do with no social security numbers to put on these W-2's?
...give me a reference...to show her how important it is that she get the social security number...

among transient workers and their handler-employers is rarer than Tourette's Syndrome, if not unicorns.

As to "requiring" W-4s, I-9s, ID#s, state forms, drivers' licenses, etc., etc., etc. -- yes, yes, and obesity should be cured, suffering abolished, and universal happiness decreed.

But...if you need to make some money in the meantime and don't want to wait until the cows come home to do it, then you'll have to bend with the wind a bit.

Look; motel managers (especially independents) are interested in extracting money from the public and work from their day-laborers. They don't care anything about your papers, but they need you and you can make good money with them. Charge a good strong fee (nothing out of reason -- they shop around), give quality service (become "their" girl-Friday bookkeeper/paper problem-solver), and they'll stay with you as a valuable bread-and-butter client.

Okay -- as to your immediate problem with the W-2s; the workers are gone and you can't get SSNs or anything else. Leave the SSN space blank on the W-2. Type in the name. The manager probably doesn't have an address either, so type in "General Delivery" (every post office handles it) for the street address and type the name of the town where the motel's located. Get money from the manager and mail the W-2s yourself (if you tell her to, she may throw them in a drawer to save postage). Some former employees may pick theirs up at the post office, but many/most will come back marked "Moved-no forwarding address." Stress to the manager to KEEP and give them to you (evidence a delivery attempt was made).

Hang on to the "A" copies 'til close to 2-28 in case you get info to "improve" a W-2. Send them to Wilkes-Barre. The "General Delivery" addresses are immaterial and SSA doesn't pay any attention to that at all. A year or two later (sometimes never) you may get a letter from Social Security (not IRS) asking for the numbers. You can (1) write "transient worker/promised to furnish number/left town" on the form and send it back (2) Ignore it; they'll (usually) write again; then, they give up. In both cases they won't bother you anymore. There won't be any penalties charged.

Never mind about the I-9s for last year. Those enforcers are rarer than unicorns (unless you're working for Swift & Co.).

That will take care of '06, but you have to start where you're at with these guys, so try to make her "do better" for '07. Fill in an "example" W-4 and I-9 (write with a red Flair) and put it on her desk with a stack of blank forms.

Threaten her with "money" penalties (they understand that kind of talk). Here's your "reference": Go to Google -- type in "Instructions for Forms W-2 and W-3." It's PDF; go to page eight "Penalties." Underline the $15-$30-$50 (various late dates) pens for each form not "correctly filed." Go to the right side of the page under "Intentional disregard of filing requirements." That $100 per form penalty usually has the effect of a baseball bat between the eyes. Bluntly advise her of dire reprisals from IRS, SSA, and state authorities -- tell her they're going to kill her with penalties or padlock the place if she doesn't start doing the right thing.

They'll never do it according to Hoyle, but they'll usually be halfway-decent in succeeding years if you lay it on thick enough.

Hasta la vista, bay-bee!

[oceanlovin'ea]

Legal to withhold paycheck?

Is it legal to hold up printing a payroll check until they produce the social security card?

I can tell her (she is a Chinese lady and a little hard to communicate with her) that if she starts an employee working without filling out W-4 and I-9, I won't cut a check until I get the information. If she tells them this when she hires them, they will bring in the SS card before payroll time, I'm sure.
They always want their checks yesterday.

Thanks for all your suggestions.

Linda F

[Jiggers]

No employment without I-9 & W-4

Is it legal to hold up printing a payroll check until they produce the social security card?

I can tell her (she is a Chinese lady and a little hard to communicate with her) that if she starts an employee working without filling out W-4 and I-9, I won't cut a check until I get the information. If she tells them this when she hires them, they will bring in the SS card before payroll time, I'm sure.
They always want their checks yesterday.

Thanks for all your suggestions.

Linda F

Linda,
you should instruct the employer that she should not hire anyone without the I-9 & W-4. Period. If they don't complete the forms before they start working, they don't work. Then you don't have the problem of holding up payroll checks. Employees KNOW they need to have their social security card when they apply for a job. If they can't comply with that simple request, then they are not qualified for that job, any job!

[oceanlovin'ea]

I agree

Surprising, this lady seems very intimidated by the employees. So I think that if they say they can't find it or will bring it later, she just accepts it.

But I will show her the instructions for the W-2's and the consequences of not having the number. I will give her a good supply of forms. I will also tell her to have them to see another person in the office to fill out the application and give copy of social security card BEFORE they start to work. That other person will probably be more persuasive.

Thanks again.

Linda F

[Brad Imsdahl]

Is it legal to hold up printing a payroll check until they produce the social security card?

Employers are required to verify that an employee is legally allowed to work in the U.S. The employer must retain a copy of Form I-9 for this purposes. Fines are imposed on the employer if this is not done.

Employers are also required to get a signed W-4 prior to hiring an employee. Employers are also required to follow the State new hire reporting rules mentioned in TTB, page 23-10.

The question on whether the employer can withhold a payroll check is interesting, because the employer is the one who broke the rules by not having all these ducks in a row prior to hiring an employee. So in essence, withholding a paycheck because the employer screwed up would be like saying two wrongs make a right.

My initial reaction was backup withholding if the employee refuses to hand over his or her SSN. TTB, page 23-5 however, says backup withholding does not apply to employee wages.

The answer is found in Pub 15, page 14, where it says:

"Ask all new employees to give you a signed Form W-4
when they start work. Make the form effective with the first
wage payment. If a new employee does not give you a
completed Form W-4, withhold income tax as if he or she is
single, with no withholding allowances."

So to answer your question, no you cannot withhold a paycheck. However, you can withhold all FICA taxes and federal income tax at the single rate with no exemptions. In most cases, that will probably over pay their tax obligation, and if they ever want a refund on the excess tax withholding, they need to give you a W-4 so you can give them a W-2. Without the W-4, the W-2 would do the employee no good missing a tax ID number as IRS would probably deny giving the employee credit for withheld taxes on their 1040.

[oceanlovin'ea]

Employer agreed

When I took the checks to her this morning, I showed her the penalties and told her when they fill out an application they must fill out the W-4 and I gave her a stack of them.

She said, "Okay, no social security number , no work and no pay". I told her that is right. So hopefully 2007 will be a better year.

Linda F

[BOB W]

Linda....

... don't forget the I-9, in many cases it is more important> bigger penalties.

[oceanlovin'ea]

I-9

Have they changed that to W-9? I went on IRS website and looked at forms. There is not an I-9 but there is a W-9. Is that the same form?

Linda F

[BOB W]

Linda....

.... here is the web site for the I-9 form. Be sure to read the form "soup to nuts" as you will need to explain the form to the person giving the form to the employee.

The I-9 form is an immigration form > not on IRS site.

http://www.formi9.com/i-9.pdf

[thomtax]

I-9 Form

.... here is the web site for the I-9 form. Be sure to read the form "soup to nuts" as you will need to explain the form to the person giving the form to the employee.

The I-9 form is an immigration form > not on IRS site.

http://www.formi9.com/i-9.pdf

Bob W,

I had been looking for this site. Glad you posted it.

LT

[Koss]

Labor Laws

Is it legal to hold up printing a payroll check until they produce the social security card?

I can tell her (she is a Chinese lady and a little hard to communicate with her) that if she starts an employee working without filling out W-4 and I-9, I won't cut a check until I get the information. If she tells them this when she hires them, they will bring in the SS card before payroll time, I'm sure.
They always want their checks yesterday.

Thanks for all your suggestions.

Linda F

I'll defer to Brad's response as far as tax law in this particular situation, where the horse is already out of the barn.

Labor law is another matter.

The employees already worked, and I don't think it's legal to refuse to pay them, even if they tell you flat out that they don't have an SSN. As others have noted, the mistake was allowing them to start work to begin with.

But it's also illegal to demand a social security card. The Form I-9 allows several other forms of documentation. I'm making a very technical and very subtle point here, that is going to become more and more important as time goes by and certain other laws change.

A US passport is sufficient to complete Form I-9. It has a photo, it proves identity, it proves citizenship, and it proves authorization to work in the US.

Your passport doesn't have your SSN on it anywhere.

And here's the part that's probably going to stimulate some debate:

As an employer, you can require the person to provide their social security number, but you cannot require them to provide their social security card.

The requirements of Form I-9 can also be satisfied with a driver's license and a birth certificate--provided that the birth certificate shows you were born in the US. (For those that haven't noticed, driver's licenses don't have your SSN on them either. There's a federal law that makes it illegal for the state to put your SSN on your driver's license.)

I'm not encouraging anyone to hire unlawful immigrants. But you cannot demand that someone produce a social security card if they have other documents that satisfy the requirements. If a US citizen applies for a job, and you offer it to them, and they produce their passport, and you rescind the job offer because they don't have a social security card, you could find yourself in just as much trouble as if you had hired an illegal alien.

You can require the person to provide their social security number. And they can provide it by writing it down or giving it to you verbally (and you write it down). Then you have something to fill in on the W-2.

If the SSN they give you doesn't match their name and birth date, you'll get a notice from the IRS informing you of this. And when you confront the employee, in all probability they'll either correct a genuine clerical error, or they will disappear.

But you cannot demand that they produce a social security card before they start work, and you cannot demand it during the application process. When they start work you get the number.

A social security card is not a form of identification.

Burton M. Koss