How to pay contractor, who to make check out to?

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RicodJour wrote:

...Lecture snipped...

Ok, we agree...

All I did was recommend to OP to say "No" to the request by writing the check to the name on the invoice letterhead, not the personal name at the bottom, so it seems we also agree...

Well, you seemed to have made a leap here I didn't take. I said there was a basic reason behind my logic.
Why that seems to have sent you over the edge I don't know.
Yes, I _do_ have a problem w/ tax evasion as a general premise. Whether I have or haven't ever slipped and done less than an ideal action on occasion doesn't seem to me to be of any import nor concern or yours, either.
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> R
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Damn, and I worked so hard on the thing! I hate editors. ;)

Usually we do. If we always agreed I probably wouldn't like you so much.

Whether it's in the memo field, a signed receipt, whatever, you're just protecting your interests and there are plenty of ways to do that. I just don't see the need to get into guessing the contractor's motivation and all of that. If you have a question, ask it. If you don't like the answer, do what you feel is best.

Your replies have been reasonable, though I don't necessarily agree with them. Some of the other replies are just daft.

DPB, this isn't an edge. It'd take a nifong load more to set me off.

Exactly! I'm not living your life - I have my hands full with my own. That's all I was suggesting about the issue at hand. Don't try to live a contractor's life for them.
R
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RicodJour wrote:

Ain't science wunnerful? :)
...

Dang! You WOULD go and throw _that_ in there... :)

I simply recommended my choice in how to protect my interest best for the specific case--really no more, no less. If an invoice is presented from an entity, imo payment should go to that entity. A memo field certainly would have some bearing, but whether there's any difference in legal status if push came to shove in a formal dispute resolution I don't know -- I simply know it would be unequivocal if the check were indeed made to the entity which seems my best protection. That it also provides at least some assurance that the recipient be required to follow the rules of the game, so to speak, is a side benefit.
(As a sidelight, if the invoice had actually been submitted on a scrap of paper in the guy's handwriting and only his signature below it, I almost certainly would have paid it that way w/o questioning it -- it's the dichotomy of a prepared invoice and the written request in contradiction to it that raises the flag. IOW, imo the contractor brought this on himself in this case. Although if he had up to this point made proposals on nice forms and presented business cards, etc., I might have then done the "why no inovice?" question. It all depends on how it "feels" overall and this just doesn't seem legit.)
That I can't see any other reason than a desire to subvert those rules (or other similar ones as in the judgment issue, etc.) is certainly part of it. I look on it kinda' like locks -- they don't prevent the determined from breaking and entering, but the do serve to keep the basically honest that way. I like to spread good wherever and whenever I can... :)
Are we done now (are we there yet)? :)
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RicodJour wrote:

I intended to make a comment on this in the other response before I quit but inadvertently snipped more than I intended.
You seem to be thinking my response is mostly on some "high moral ground" basis. While "what's right" is part of it, mostly my objection is really quite pragmatic and self-centered. (Whether in the big scheme of things it is generally effective in making a difference is, of course, a totally different question.)
The point is, if I _were_ a contractor (I am self-employed and have been for some time so I can directly relate) doing business according to the rules I'd be far less than happy at having to compete against the guy who isn't. What little I can do to discourage or make that a little more difficult is only helping me in a competitive sense.
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In general, if the only people who were able to give good advice were the people who had never violated that same advice themselves, there would be very few people who could give good advice.
Many people learn from their mistakes, and many learn better than those who have never done the wrong thing.
No one has used the work hypocrite yet, but it's not hypocrisy even for a repeat litterer, or a repeat Casanova or a repeat criminal to tell others not to do the same things he does. Who knows best the problems that come with doing those things but one who does them. It's only hypocrisy if he tries to give the impression that he doesn't do or never did the things he actually does, or did, and even then that doesn't make his advice bad.
If people don't have standards that are higher than their behaviour in some ways, then they are saints or their standards are not high enough.

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On Tue, 19 Jun 2007 23:55:03 -0700, "Tube Audio"

Make it payable to their request. A lot of businesses have checks made out to the owner. Dentist is one example. More power to them if they can avoid taxes and never get caught.
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Having checks made out to you personally is a pretty dumb tax avoidance scheme. There will be a trail of cancelled checks for years, which would make an excellent and irrefutable evidence in a tax case. And as you point out, it's not unusual to pay some businesses in the name of the owner.
I don't see how any of this relates to permits or proof the work was done. If permits were pulled, they are on record. There should also be a contract or at least a receipt for the work done, which will be marked paid. The fact that a check was written out on that date for that amount to the owner completes any evidence you need that the work was done and paid for.
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I agree. If the work was done by this man, why not write it out however he wants it written? who really cares how he does his banking or his taxes? It probably makes it easier on him... maybe allows his wife to make the deposits or whatever... it's irrelevant

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Phisherman wrote in message

I never made a check out to a dentist that I didn't put Dr. on it.
Cheri
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Cheri wrote:

That's because that's how most individual dentists list themselves professionally and do business under that name. At one time I went to a consortium and they collected all payments under the name of the consortium.
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Let's flip this around. I'm sure you've received checks from customers/clients/friends that were drawn on their business' account, and whatever the transaction was, it wasn't a "real" business expense. Do you refuse the check? Do you get all huffy because they're looking for a deduction?
R
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RicodJour wrote:

I fail to see the connection to the situation to which I responded to Cheri w/ the subject of "receiving" vis a vis "writing" but so be it.
You may be "sure" that has happened, but I honestly can't think of an occasion/incident.
Don't know why you're so intent on riding me on this unless it's to assuage your own conscience, but I stated what I would do on the question of _writing_ the check and my reasons therefore.
That we have a difference of opinion seems apparent and further jousting pointless (and futile)...
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RicodJour wrote:

The sign on my office wall reads:
"There is no right way to do the wrong thing"
Jeff
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(W1BSV + Brass Rat \'57 EE)
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On Wed, 20 Jun 2007 12:36:23 -0700, RicodJour

I don't have a business and don't get many checks.
But I'll tell this story. I was selling my cargo carrier because I was forced to buy a lighter one. The woman on the phone went into detail about how they hoped to use one like mine on vacation.
At the end of the conversation, she said her husband was a minister and asked me if I would give it to their church and take a tax deduction. She never said a thing about using it for church business.
It's barely used, good as new, better than new with my reflective striped tape and carpet bumpers, and assembled by me, and I have the original receipt, where I paid more than they charge now, so I could surely save on taxes 30% of the original cost, which is as much as I can sell it for, but no way am I playing her stinking little game.
And I wouldn't attend her church either.

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Cheri wrote:

For a thought experiment to illustrate the difference -- think of suing that same dentist personally and imagine how how high the barriers are between his personal assets and those of the business under that name! The probability of you getting to the proceeds of that check you wrote with his name on it are pretty miniscule... :)
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Think you'd do any better suing a contractor? He probably leases all his equipment from his wife.
This thread really is one of the silliest ever. If the contractor wanted to evade taxes, he'd want cash, not a check. If you are not willing to go along (if that was his intent) then next guy will and it does not matter since he still has to claim some income, be it your or the last/next person.
Trying to sue a contractor is not easy since most assets are in some other name anyway, or will be the day before he is served court papers.
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Edwin Pawlowski wrote:

Assuming the guy has any business acumen at all, of course. They'll be in a LLC or some other way to protect personal assets. The point was only to illustrate the name isn't _necessarily_ the person....

Oh, it has a _long_ way to go to get to that point... :) (or should that be :( ) :)
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It doesn't matter what you do, but if you make the check out to the company, you are done. If you make it out to the person, you are supposed to issue a 1099 to the person at the end of the year -- so the person can't avoid taxes.
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I don't have a bank account in my company name. I suppose I would pay less taxes in that case, since I would not have been paid; though I would have to sue you.
Why not avoid all that and just pay him? I did just get a company credit card; I thought that was pretty cool.
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Toller wrote:

Bad practice --

See my reasoning in other response for why I'd choose the same way. That you're not professional enough to run a business isn't my concern. If you're going to represent yourself as a business, I'm going to deal with the business. If you want to deal as an individual, come and represent yourself that way to me and I'll send a 1099 at year end.

Fee for that probably costs more than the checking account would...

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