Don't Try This At Home
Ariella posts an ad that appeared on a public forum which reads as follows:
"Perfect as part time or telecommute: We need you to search the internet and databases (will be provided) for potential customers. Will pay $12 an hour in cash weekly (this is the equivalent of $24 an hour on a 1099). Must have some experience in business, research, sales, insurance etc to be able to define a "Qualified Potential Customer" Please contact us____"
Whoever takes this cash job should be prepared to cough up 14.1% for employment taxes (92.35% * 15.3% * profit) plus their federal marginal rate + their state marginal rate.
Just because your employer doesn't intend to issue a 1099 to a (presumably legitimate) contractor, doesn't mean the IRS won't want their cut when they come a knocking. I know someone who took a cash job and was ultimately stuck with the bill + interest + penalties because he didn't want to be a 'moser' and defend himself against the employer who could not claim he was a contractor in the least.
Anyone who takes a $12 an hour contracting job and ends up getting audited is going to feel really stupid when the bill arrives. You certainly run the chance of stealing not only from the government, but from yourself!
And to the businessman: don't let the newest scandal get in the way of announcing your intentions to evade taxes on a public listserve. Have you no shame?