No, he knew she was an illegal alien or he would have been paying the taxes all along and not paying her under the table.
No, he knew she was an illegal alien or he would have been paying the taxes all along and not paying her under the table.
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This is one likely explanation.
If she was indeed his employee, how could he NOT have been withholding and depositing employment taxes?
Only possible “out” for him is that she was an independent contractor, not an employee (1099 services instead of W2 earnings). But that is not likely to hold up under the common IRS tests used to decide between employee/contractor. It is often a shady situation to try it. If he hired a service company that employed its own employees to provide the housekeeping service, he might have a stronger argument. I doubt that is what happened here.
If he had been withholding her employee taxes and reporting her labor on forms properly all along, and she was then later discovered to have provided him with fraudulent docs, he might have a sympathetic case. The fact that he sent in taxes AFTER 3 yrs when he supposedly discovered she was an illegal is by itself very suspicious.