Tag: irs

The Norm For The Beauty Industry!

This was from a Facebook article that I joined in and here is the problem.

Hello,

My name is Joe and I am trying to get some advice for my wife who is way too nice. So a quick run down on the events.

My wife has worked at a spa for approximately 3-4 years before quitting for another spa. She was paid commissions of 50% and also had a $20 a month so call “booth rental”. She files a 1099 and pays all her own taxes. She was always asked to make trips to get products and called in for meetings but never compensated for her time. All products were supplied by the spa.

So upon my wife advising the owner that she was quitting because lack of steady business and comments regarding closing the hair side of the spa down, my wife was advised that she is not to contact any clients and that if she did so, she would take legal action. Please note that there was no contract of any kind signed. So my wife sent out a text and card to all of the clients that she has worked on just saying she had relocated and if they would like to schedule an appointment to please contact her. Apparently one of the clients brought in the card to the old owner and my wife was sent another text saying this is her last warning.

The very next day, one of my wife’s friends/clients that she has been doing for a long time called her to make an appointment and advised that she had received an email from the old salon stating that My wife was no longer employed at the salon and that she is offering all clients a 50% discount off of hair and free partial facial.

I personally feel that this is a low blow seeing how my wife did not stoop to that level and only sent out a card saying she had relocated. Is there anything that can be done to my wife for sending the cards or any advice you can give on how we should respond to the owners threats?

I appreciate everyone’s time and look forward to your responses.

The concerned husband,

Joe

These are some of the comments contributed by fellow professionals.

The salon and your wife don’t own clients they get to decide for themselves. The old owner is all bark no bite”

She should count her losses and move on. The clients who are loyal will follow her. It’s useless to fight with unreasonable people and it sounds as though her former employer is clueless. She’s not under a contract so your wife can contact whomever she pleases, the consumer will make a choice.

There was nothing written in contract, and actually, the employer can get in deep trouble for charging rent AND being considered having an employee. You can’t be both. It’s too gray- she was not paying your wife’s employment tax, yet treating her like an employee. Legally, your wife would have been responsible for everything, supplies etc. she charged her rent to get past paying her employees taxes/minimum wage. Of course the owner wanted to try to retain the clients but since there was no non compete….. id tell your wife to tell her former salon that if she doesn’t stop harassing her, she will report them for unfair labor practices.”

All you need to do is tell the old salon owner that you will be filing an SS-8 with the IRS to determine if your wife was in fact an commissions or a booth renter and if it’s found that your wife was an employee, then the salon owner will be responsible for back taxes AND will most likely be fined by the IRS for tax’s. You may share this website for verification to the salon owner so she doesn’t think you aren’t meaning business. Whether you actually do it or not is up to you. It appear as if your wife has been classified and you probably should file. You won’t need a lawyer if you get the IRS involved. You can also file with your state’s labor relations board. They aren’t quite as effective as the IRS, though. This is serious business with the IRS. They do not like to be fooled by the tax payers! As someone who has had to deal with them over an unemployment insurance issue, trust me…they have no mercy! (I’m all legit now! I pleaded no knowledge and they let me get away with it once! I had to pay a pretty stiff fine, though!) Don’t be afraid to let the salon owner know that you aren’t afraid to call the IRS. Quite honestly, your wife should not have had to pay taxes all these years.”

SAD!!!

This is the Beauty/Cosmetic Industry. If no contracts were signed she has every right to contact the client. Also the owner has every right also. If the harassment continues from the owner such as the emails stated. Please acquire a cease and desist order against her. And then enjoy your lives. These tactics from the owner are ol school tactics of intimidation. But the owner has every right also just like the employee to keep the business. Since she provide the clients to your loved one. Two way street, this is beauty business and this is how it goes. Its like a whores business, Pimp and Prostitute. It will never change. sir. Primitive industry. Good days, really? It is a lovely craft, but after making 2 documentary’s of the industry. Nothing has changed. Its a free for all. Yes the only way of changing the industry is being a mentor and a role model. Many good MEN and WOMEN are used in this industry. You are really seeing the corporate slavery now. It is hard for all the youngsters coming out to make a living. On the payroll percentages corporations and independent owners are paying. So many professionals I see are taken advantage of. All for GREED, Disgusting.  I don’t see this profession as a viable form of income. Anymore. Unless you are with a Union or the Film/Entertainment Industry. But I love the craft you can always keep learning. I like craft more now since I do makeup and photography and films. You can really learn a lot combining the three crafts. I now just concentrate on the craft. I no longer friend people in the industry. I have found out anyone can be anyone on the internet. So I surround myself with like minded people and stay away from the so called “Stars”.  Internet stars that is! lololol

 

Real Hair Truth – Michael Gordon Playing it Cool.

The Beautiful Lies

Up until the 2006 sale of the B&B brand (the salons, the products, et al) to Estee Lauder (most people don’t realize that it also owns Clinique, MAC, Bobbi Brown, La Mer, Origins, Jo Malone, Smashbox, Aveda, and Darphin), from time to time you could catch a site of Mr. Gordon on the premises.  His mannerism always struck me as a peculiar combination of a relaxed composure (grapevine has it that he is into Buddhist spirituality) and a blatant assholiness toward some employees.

But, as I always say, you don’t get to be a successful entrepreneur by being warm and fuzzy.  To survive in business you need to be tough.  Some of us can be tough and decent at the same time.  Unfortunately, that’s very rare.  Well, since I didn’t need to deal with him personally, I was able to abstract  into what he was as a small-business owner: someone, who started from nothing and grew his brand to international recognition.  I admired him for his courage, drive, and strategic savvy.

Also, one cannot dismiss the fact that for Mr. Gordon it wasn’t just about branding, growth, and money.  He was truly a hair-man, devoted to the idea of creating high-quality products that satisfied a wide spectrum of needs.  Unlike the vast majority of other famous salon owners (Sally Hershberger is one example), who are engaged in “private label” merchandising (i.e. buying generic, mass-produced,  “juice” and pouring it into containers with their names), Michael Gordon actually developed unique mixtures, which are used to great effects in many salons and homes.

It was his quality standards and unrelenting drive to succeed that fascinated me.  Imagine my surprise, when I read in New York Times that this remarkable and shrewd businessman was arrested for tax evasion.  And it wasn’t even for something cleverly devised (not that I would approve that) – no, it was plainly stupid: he didn’t declare on his tax return the $30 million capital gain generated by that famous sale of B&B.

The charges (both criminal and that of stupidity) against him are mounting: when he was questioned by IRS about this omission, he claimed ignorance of the fact.   And that’s lying to a federal agent, because apparently there is evidence of his active attempts to hide this money.

What is the point of lying like that anyway?  Didn’t he sign his tax return back in 2007?  He never heard of capital gains? Weren’t there a horde of lawyers and accountants involved in the closing the deal?  Nobody mentioned the tax liability?  Hard to believe.

NYT didn’t make it a secret that IRS has acted on a tip received from a “confidential informer.”  Of course, they did.  Truth be told, IRS doesn’t have sufficient resources to look for specific violations of the tax code.  The best they can do is to react to the red flags selected by their algorithms.  Your employer reported your earnings, but you didn’t include them on your tax return – an inquiry will commence.  Itemized deductions  exceed certain levels, even if by $100 – the flag will be raised.  Meanwhile, corporate executives receive multi-million dollar perks and call them “business expenses”; private shareholders transfer stocks and property between related parties and don’t recognize capital gains; owners make equity withdrawals and show them as loans – and none of it ever get noticed.

However, the situation changes if someone makes a call, sends a letter, or an electronic message to IRS, detailing a case of the tax evasion.  If this someone provides sufficient information and the violation is big enough to prick up agents’ ears, they will be on the case right away.  Especially if it involves a notable figure that can get media interest (hey, you cannot blame IRS agents for wanting some attention).

Even though IRS has, what they call, a whistleblower reward program, it’s not easy to get paid for reporting tax violations.  Obviously, in most cases, the informants are not motivated by money.  Typically, they have some sort of a relationship with the evader and it resulted in two outcomes: an incredible animosity that goes way beyond a simple grudge and the knowledge that the government is being shortchanged.  The IRS becomes a mere weapon of revenge.

This is why Leona Helmsley went to jail in 1992.  The Queen of Mean dragged behind herself a trail of disgruntled contractors, corporate employees, and household help, who really hated her.  Some of them possessed hard evidence proving that millions of dollars spent on personal properties were billed to Helmsley’s real estate business.

And that’s why Michael Gordon got arrested.  In his brazen manner, he must’ve rubbed the wrong way someone with the first-hand knowledge of the $30 million unreported gain.  That hurt someone dropped a note to IRS.

Do I have to state the obvious?  Don’t steal big bucks from government – it’s dangerous.  But if you make a conscious decision to dodge some taxes, make sure that no one knows about it but you.  And I mean NO ONE.  If that’s impossible, make sure that you are super nice to those who are onto you – they have your freedom in their hands.