Thursday, July 27, 2017
SHERIFF SHOAR, WM. HARRISS Committing Tax Law Flummery, Dupery and Nincompoopery?
(Wm. Harriss' July 9, 2017 text message to Commissioner Roxanne Horvath supporting KANTI PATEL's SAN MARCO HOTEL PUD).
Great apercu by Michael Gold in Historic City News about Sheriff DAVID SHOAR and WILLIAM HARRISS, who as St. Augustine City Manger hired SHOAR as Police Chief. HARRISS returned the favor, hiring HARRISS as an "independent contractor." Tax fraud? SHOAR is paid $1500 per month, cash, with no withholding. Illegal? HARRISS is "director of the sheriff’s infamous “Four Star Association”, and now a paid contractor who furnishes various unspecified 'consulting and strategic planning services.”
SHOAR and HARRISS might have to prove their case that HARRISS is not an employee in an IRS tax audit or in Tax Court, or in federal court.
The strange romance beween Sheriff DAVID SHOAR and WILLIAM HARRISS continues. Is HARRISS an employee or an "independent contractor?" Or is the St. Johns County Sheriff going to be required to pay withholding for the entire term of HARRISS' employment by SHOAR, 2010-2017? Is this a felony?
Tough sell under the IRS 20 factor test for whether someone is an "independent contractor":
IRS 20-Factor Test: Independent Contractor or Employee
Basic Question: Who Has Control Over the Work Being Done?
1. Instructions. Workers who are required to comply with others’ instructions about when, where, and how they are to work are ordinarily employees.
2. Training. Training workers indicates that employers exercise control over the means by which results are accomplished.
3. Integration. When the success or continuation of a business depends on the performance of certain services, the workers performing those services are subject to a certain amount of control by the owners of the businesses.
4. Services rendered personally. If services must be rendered personally, employers control both the means and the results of the work.
5. Hiring, supervising, and paying assistants. Control is exercised if employers hire, supervise, and pay assistants.
6. Continuing relationships. Continuing relationships between workers and employers indicate that employer employee relationships exist.
7. Set hours of work. The establishment of set hours of work by employers indicates control.
8. Full-time required. If workers must devote full time to employers’ businesses, employers have control over workers’ time. Independent contractors are free to work when and for whom they choose.
9. Doing work on employers’ premises. Control is indicated if the work is performed on employers’ premises.
10. Order or sequences set. Control is indicated if workers are not free to choose their own patterns of work but must perform services in the sequences set by the employers.
11. Oral or written reports. Control is indicated if workers must submit regular oral or written reports to employers.
12. Payment by hour, week, or month. This points to employer-employee relationships, provided that this method of payment is not just a convenient way of paying a lump sum agreed on as the cost of a job. Independent contractors are usually paid by the job or on straight commission.
13. Payment of business and/or traveling expense. Employers paying workers’ expenses of this nature shows that employer-employee relationships usually exist.
14. Furnishing tools and materials. If employers furnish significant tools, materials, and other equipment, employer-employee relationships usually exist.
15. Significant investments. Workers are independent contractors if they invest in facilities that are not typically maintained by employees (such as an office rented at fair market value from an unrelated party). Employees depend on employers for such facilities.
16. Realization of profits or losses. Workers who can realize profits or losses (in addition to profits or losses ordinarily realized by employees) they are independent contractors. Workers who cannot are generally employees.
17. Working for more than one firm at a time. If workers perform services for a number of unrelated persons at the same time, they are usually independent contractors.
18. Making services available to the general public. Workers are usually independent contractors if they make their services available to the general public on a regular and consistent basis.
19. Right to discharge. The right of employers to discharge workers indicates that the workers are employees.
20. Right to terminate. Workers are employees if they have the right to end their relationships with their principals at any time without incurring liability.
HISTORIC CITY NEWS
Sheriff milking the budget – let me count the ways
July 27, 2017 Government
Recently Historic City News purchased a report containing the payments and deposits through St Johns County Sheriff David B Shoar’s operating account. He’s asking for millions of your dollars to provide law enforcement services next year; so, we wanted to look at how he is spending the money he got last year.
We are still sifting through the check register (even though on June 7th, Records Supervisor, Sergeant Bonnie Jimmerson, told us “The St. Johns County Sheriff’s does not operate from a check register nor has it maintained a check register since the late 1980’s”) and we are pulling records as we spot items of public interest.
We’ll start with using agency funds to payoff friends and campaign supporters, and the first example is a glaring one.
In a formal announcement to the City Commission on April 26, 2010 William B Harriss resigned his position as St Augustine’s City Manager — the man that Shoar answered to from 1998 to 2004.
Harriss, who will turn 67-years-old in October, is a reserve deputy with the St. Johns County Sherriff’s Department, is listed on the tax return as a director of the sheriff’s infamous “Four Star Association”, and now a paid contractor who furnishes various unspecified “consulting and strategic planning services”.
Under his current contract, Harriss takes $18,000 a year from the general budget. Last year he only reported $13,100, according to his Form 1099-MISC. On the first day of each month, the sheriff pays Harriss $1,500.00; unsupported with a detailed voucher or invoice.
Harriss made the contract with Shoar as an individual. He does not hold a St Johns County Business License (Business Tax Receipt) to legally provide consulting services. He is not incorporated, nor has he filed a Fictitious Name Notice, establishing himself as a business entity.
However, Shoar is not withholding federal income tax, social security, or Medicare from Harriss’ check, and the IRS has ruled that it takes more than a “Services Contract” to establish an “independent contractor” relationship. He will probably be considered an “eligible worker”, subject to withholding, in an IRS audit of his paid relationship with our county sheriff.
From the Internal Revenue Service:
Most individuals you hire are considered “employees” by law. These include:
Temporary workers unless hired through a temporary services company that has the worker on its payroll
“Casual labor” and many “1099 workers”
Friends, relatives, and others receiving anything of monetary value in exchange for their work
Many independent contractors:
Independent contractors must meet specific requirements to be considered exempt from employment laws.
There are several laws defining independent contractors, each with different requirements.
You can’t assume someone who meets the independent contractor definition and is exempt from one set of employment laws is therefore exempt from other laws.
The burden is on you to prove someone who works for you is NOT an employee.