My former childcare provider asked me not to claim what I paid to her on my tax return.?

Question

She claimed she doesn't have to file a return because she doesn't make enough. However, she keeps several other children at $20 per day which would translate to at the least $300 per week which means she makes more than the minimum amount not to file. She also threatened to take me to court if I didn't give her $200 for not giving her a notice of termination. My question is, should I turn her in to the IRS since she would not give me her tax information? I spoke with the an IRS representative and she said this woman should be claiming the amount I paid her.

Answer 1

She is blackmailing you and evading taxes. I would report her to the authorities. You have no requirement to give a notice of termination, you had no contract with her - or did you? Either way, she is giving you an empty threat. I highly doubt she has the money for an attorney making $300 a week.

Answer 2

If you don't claim it then your only hurting yourself. If she makes 300 a week then she makes enough to pay taxes. As for the early termination, If you signed a contract then read it. If you didn't sign one then you don't have to give her notice.

Answer 3

Tell your former childcare provider to take a flying leap.  She is not paying federal and state taxes plus her social security.  She has more to lose from the tax authorities than you do in a small claims court.

Answer 4

You can claim the child care credit. You request her Tax ID. If she refuses to give it to you, file the 2441 with her name and address and, on a separate sheet of paper, the steps you went through to get her ID.

You Will need to file a paper return (no e-file), but you will still get the credit.

She will face  penalty for failure to provide the ID # and they may audit her return.

I would also find another childcare provider. She is trying to blackmail you, but you have more on her than she has on you. You didn't do anything wrong. As for taking you to court: I wouldn't worry too much. Tell the judge that she is refusing to provide needed documentation and trying to cheat the government.

Answer 5

Good question, if she was hired as a "Contract Worker" it means you do not deduct for taxes etc. She would be liable to pay those on her own. If you hired her and deducted the taxes etc. you would have to claim her as an employee. The IRS would the look at her for the money earned or a tax filed even it you don't earn enough to pay taxes. Is this a off premises location or does she do it in your home as a so called "baby sitter". I would claim her on my return. I worked with a fellow that did not claim wages from a part time job and the the person who paid him claimed him as an employee. He lost his house and car to the IRS as he couldn't pay what was owed to the IRS.

Answer 6

First, there is no way she is going to take you to court, given her circumstances.    

After you no longer use her service, ask for the Tax ID number in writing.  You can wait until January 2009.  Once she does not respond, you have done your due diligence and can claim the child care credit.  This may trigger an audit for her, or maybe not

In addition, you can also inform the IRS of her operation.

Answer 7

If the woman is babysitting in her own home, she had a filing requirement as soon as the net income was $400 (this is due to the self-employment income).

Whether or not you claim the babysitting expense on your tax return, she had a requirement to claim the income.  She cannot avoid this by refusing to give you her SSN.  

By attaching her name and address to the form 2441, you will have turned her in.

As for the $200 fee.  Pay it by check.  Just as you've paid all of your other babysitting expenses.  When audited, all of her deposits will be assumed to be income.