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EthicsLesson-Unit5 - having to pay these matching amounts...

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Professor and Class, Jarrod McIntyre is discussing a summertime job position with Connor Lang. Jarrod is asking Connor to accept the job on a cash pay basis. This would mean that Connor would not be placed on the company payroll books, nor will his income be reported to the IRS. 1) Why does Jarrod McIntyre want to conduct business transactions using cash 9not checks or credit cards)? For one thing, Jarrod has more of an ability to hide incoming or outgoing income from his company. Secondly, by paying his employees cash “off the books”; he is also cheating them out of Social Security and Medicare benefits. Each time an employee pays in Social Security or Medicare taxes, the company must also pay a matching amount. As long as Jarrod pays Connor cash, he will avoid
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Unformatted text preview: having to pay these matching amounts. Not only is Jarrod cheating Connor out of his Social Security and Medicare benefits, he is also removing any ability Connor would have to file this income on his federal income tax return. At the end of the year, Connor will lack a W-4 or a 1099 of his income, therefore will not be able to file this income on his return. 2) How should Connor respond to Jarrod’s suggestions? If I was in Connor’s position, I’d request to be placed on the companies “official” payroll books. If Jarrod refused to do so, I’d kindly decline the position, and report his unethical and unprofessional behavior to the IRS. Wendy Eller...
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