Post Employment Harassment
Hi,
I am writing this on behalf of my mom. She worked for a very small company for about 13-14 years as an office manager. She was in-charge of most financial related items including receiving cash from customers, paying bills, etc. As part of her compensation, the owner agreed to pay certain expenses for her including car insurance, cell phone expenses, etc.. which she would pay herself from the company checkbook. The owners also set up a life insurance policy which was in her name and which named as co-beneficiaries the company as well as myself. It is now my understanding that the extra expenses paid by the owner were never included as income for my mom (and thus no taxes were ever paid on them). Over time, the condition of the company began to deteriorate and the owner decided to let my mom go (with little warning and with little explanation). My mom received a phone call shortly thereafter and was asked to either continue paying the premiums of the life insurance or take the cash surrender value of the policy. Being unemployed, she elected to take the cash. Since that date, which has now been almost a year and a half, the owner has called her up continuously and has harassed her over the life insurance policy. Originally, the claim from the owner was that she didnt intend from mom to get the cash surrender value and wanted half of the money received. Today, it has gone as far as now accusing mom of stealing from her when employed for the expenses which were paid and making a number of threats regarding tax authorities, lawsuits, etc. My question is - does she have any legal right? I understand that she can and probably should repair the W2's prepared in the past to include the additional expenses paid by the Company. Would the revised W2s result in interest and penalties if the mistake was not her fault (and one of which she did not have knowledge)? Does she have a right to the life insurance proceeds? What can be done to stop the owner from harassing my mom?
I appreciate any thoughts or advice you can provide.
Answers (2)
How sad! And, after all those years of working for them. I agree that you need tax advice from an expert. With help from a good CPA, you might be able to keep whatever interest and penalties that could exist to a minimum. Good CPAs are good negotiators with the IRS.
AS to the life insurance policy, take the papers you have about that policy, including especially whatever your mom got from the insurance company that told her she had the right to cash it in -- to an employment or I think perhaps even a family lawyer to get a legal opinion on whether your mom had the legal right to do as she did. Then, go from there.
Good luck!
posted by Margaret A. Harris | Aug 3, 2005 09:26 AM [EST]
Unfortunately, your Mom will owe penalties and interest for not reporting the income properly. I strongly suggest that she see a CPA or tax specialist on this issue.
As far as the employer is concerned, shecould get an attorney to send a cease and desist letter to the company. This might make the harassment stop. If the employer tells someone else that she is a thief, she may have a defamation claim. On this issue, I suggest she seek a local attorney.
posted by Trey Henderson | Aug 3, 2005 08:30 AM [EST]
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