Tea for one
In Oregon, my Rent-A-Nerd computer consulting/support business has been suspended permanently, thanks to the Oregon Employment Dept. Some may find the story of interest, so I wrote a novella about it, and how I feel about it.
Tea for one is partially an attempt to provide myself with anger management therapy, an attempt to get past what has been taken from me, what I have lost through this "travesty of a mockery of a sham", to quote Woody Allen.
Tea for one is also a cautionary tale, an attempt to inform others about the injustices that the State is inclined to inflict upon those who try to operate very small businesses, for the benefit of those who operate larger businesses. Tea for one is basically a story of a "nerd going postal" - and why.
Tea for one can now be downloaded for FREE from this direct link: http://smashwords.com/b/35040
It is available there in various e-reader compatible formats, or in .pdf format. Note - .pdf files are readable on your computer if you have Adobe Acrobat reader software installed, downloadable for free from Adobe.com
Since the date I published Tea for one, my ongoing battle with the Oregon Employment Dept. and the State of Oregon has continued. My legal options in this battle are becoming more limited, and much more expensive, likely prohibitively.
However, on the second front, the court of public opinion, things are looking better. The process, although slow, has brought out some truly incredible items. I list a few of these items below.
The Tax Man's Hall of Shame
A. The first false premise of the Oregon Employment Dept. which they utilize to levy an unemployment insurance tax upon me, essentially taxes me for transactions in which I am neither the payer, nor the payee. They claim that they can do so because I supposedly indirectly paid the affiliated technicians, in spite of the fact that they were actually directly paid by the customers for services rendered. There were no monies from me or my accounts going to the customers for any such indirect payment to the technicians. My business income derived from referral fees that the technicians paid me twice a month.
B. The Employment department has refused to answer my question regarding what the technicians were paying me for (undoubtedly for the services I directly performed for them). They also have not answered the question of why they are able to selectively apply ORS 657.040, which clearly states that when an individual is paid for providing a service, there are only two possibilities, the individual is either an employee or an independent contractor. If applied to the transaction between myself and the technicians who pay me, it clearly and unambiguously determines the business relationship I had with the affiliated technicians. The clear result is that I am an independent contractor directly paid by the technicians to provide promotional, organizational, and administrative services directly to the technicians, who are thus shown to be my customers. Instead, the Oregon Employment Dept. contended that I indirectly paid the technicians, and the technicians indirectly provided services for my benefit, so they are my employees, unless I can prove that they are independent contractors, the two choices mandated by their selective application of ORS 657.040 to this supposed indirect transaction.
C. In the first hearing, I was accused of being an employer, and was presumed guilty unless I can prove a negative - prove that I am not an employer. This is based upon the presumption of prima facie correctness of the Employment Dept. determinations, which places the burden of proof upon the accused, applied in most tax cases. In an incredible circular argument, in the first hearing the Employment Dept. contended that I am a Unemployment Insurance taxable employer because I indirectly paid the affiliated technicians. In the second hearing about their subsequent payroll tax audit and assessment, my newly hired attorney informed me that their argument would be that since I am an employer, I must have indirectly paid the affiliated technicians wages! The presumption of prima facie correctness also applies to their payroll audit assessments. The Administrative Law Judge, whose paycheck comes directly from the Employment Dept., refused to postpone the scheduled second hearing sufficiently for me to obtain documentary evidence from the IRS which would address the indirect payment issue in relation to federal business income tax accounting practices and the federal definition of income. His denial of my request for a postponement essentially denied me an opportunity to disprove the Employment Dept. claim that I indirectly paid the technicians wages and thus disprove the truth and accuracy of their audit. During the long Court of Appeals review of the first hearing, the Oregon Dept. of Justice, representing the Employment Dept., requested and received more than six months of postponements because their caseload was too heavy. I also found it amazing that the Oregon Employment Dept. refused to answer questions or discuss the payment issue prior to the hearing, so I did not find out about their phantom payroll concept until during the hearing at which it was my burden to disprove it.
D. The second false premise of the Oregon Employment Dept., was that it is somehow possible for me to make quarterly payroll reports based upon their phantom payroll concept, my term for their claim that I indirectly paid the technicians. A provision within ORS 657 specifically requires employers to provide true and accurate quarterly payroll reports, listing their employees and accounting the wages the employees have been paid for the services rendered. Employers are required to certify the truth and accuracy of these quarterly reports with their signatures. I contend that since I am not a party to these transactions, I have no way of certifying how much customers paid affiliated technicians for computer services rendered. I also argued that the Legislature would not have made impossible demands of otherwise legitimate businesses, which indicates that the language of the law directly contradicts the Employment Dept. phantom payroll concept.
E. The third false premise of the Oregon Employment Dept. is that their phantom payroll concept, that I indirectly paid the affiliated technicians, is supported by state and federal tax codes and business accounting rules and practices. My real business income, the referral fee amounts paid me by the technicians, amounted to about one third of the amount of my supposed payroll. Since wages paid are a deductible business expense, if I deducted their phantom payroll from my real income on my federal schedule C, my business would have been operating each year with a sizable loss. If I were to apply their indirect wage payment concept and make that deduction, it seems likely that I would be guilty of income tax fraud.
F. The fourth false premise, a real humdinger recently delivered to me on Oregon Dept. of Revenue (ODR) letterhead and signed by a senior policy analyst, is that the amounts that the customers directly paid the technicians, which the technicians accepted and deposited into their own accounts and spent as they pleased, constituted my income. This mind-blowing idea is necessary for the books to balance as a result of item E, above, and is best characterized as the reason that Pinocchio's nose grows. Once invested in a false premise, attempts to support it tend to snowball and become increasingly unbelievable. This last false premise means that not only did I supposedly have a phantom payroll, but in order for the phantom payroll concept to work, I must have had phantom income as well. Since I was therefore not a party to my own income, not only was there no way for me to sign quarterly payroll reports, there was also no way for me to sign my own income tax returns, since I could have no way of knowing how much phantom income I made!