By Stacie Clifford Kitts, CPA
This is a multipart series about a girl who was enticed into the indentured life of a door-to-door seller of magazine subscriptions. Her recount of industry practices and the resulting tax consequence is truly shocking.
This story also illustrates the importance of understanding your worker status for employment tax purposes, understanding contracts your employer asks you to sign, the need to research industry practices particularly in door to door sales, accounting and tax issues associated with cash transactions, tax consequences of self employment and Form 1099, the importance of having a Plan B and consulting with the right advisors before making life decisions, oh and gee a bunch of other scandalous stuff.
This story also makes us question why our lawmakers continue to allow this industry to persist in its abuses against America’s youth!
Part One – How The Nightmare Started
It was a warm fall day not so long ago when a young man knocked on Abigail’s door. He was selling magazines. “Can you help me out by purchasing a subscription?” he asked.
Now as it turns out, Abigail had recently graduated from high school and had just moved into her own apartment. She was also attending classes at the local college and working a part time job. But she wasn’t happy in her new life. College wasn’t what she had expected and money was tight. Abigail was aching for something to change. And change it would.
“Oh he really was a confident little charmer,” Abigail explained as she recounted her story.
He stood on her porch and flirted, saying all the right things. And before she knew it, she was handing over her phone number along with the remains of her monthly allowance. And as expected, once he had her money in hand, the conversation quickly ended. Abigail was sure she would never hear from the charming young man again.
But she was wrong.
Not long after, Abigail began to receive phone calls. For several days Abigail and the young man had long engrossing conversations. It was during these conversations that Abigail learned how concerned he was about her and how he wanted to help. He told her how he could provide her with a better life, filled with excitement and adventure. “We could have so much fun,” he told Abigail. “Why don’t you join my magazine road crew? You can make lots of money and travel all over.” It was a chance of a lifetime, you see, because not just anyone was invited. She was special. He could tell she would do well.
But there was this one small tiny little problem. She had to leave straight away before his crew left the area. There was no time to talk to her parents, no time to drop her classes, no time to deal with her apartment lease. If she was going to come, she had to do it now.
Irrational as it might sound, the choice for Abigail was clear. She would join the charming man on the road, have fun, and make tons of money. She packed a bag, locked the door to her apartment, and said goodbye to her old life……
If you are interested in hearing more about Abigail’s nightmare, stay tuned for the upcoming post: Life on The Road With Nick.
Note: This story is based on true events and is told with the permission of the taxpayer. Names and some events have been changed at the taxpayer’s request.