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Thread: insurance policy quote base on company driving history or owner dmv record?

  1. #16

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    You have a lot of issues. You should probably get at least one car properly licensed and insured before you start "hiring" drivers.

    As far as 1099 or ICs, it sounds like you are simply trying to skirt labor laws and avoid paying and properly accounting for payroll taxes. Unfortunately, not uncommon in this industry. It won't be a problem unless the IRS comes sniffing around (they'll wait to you're making money) and then seize your personal property to obtain all the payroll taxes that you should have claimed for your EMPLOYEES since day 1 of your operation. Don't worry, they'll wait till you have enough assets to make it worth their time.

    Please take heed from the above advice from Limo Scene.

    Also, every time I consider hiring a chauffeur, my insurance agent tells me 1. if they are insurable and 2. what the impact to my premium will be. If the insurance agency wants more money to insure a particular person, there is a reason, again, take heed.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  2. #17
    Super Moderator Limo Scene's Avatar
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    Yes, Andrew. There was a time back in 1990 when I too thought I could get away with the whole 1099 thing. It didn't bite me in the ass until about 1996 when a part-time driver lost her full-time job. In the course of filling out paperwork for unemployment they asked her to list ALL jobs in the past year. She listed our name. BOOM. We were ordered to pay payroll taxes with interest and penalties for the past 6 years to the State of Californian who was generous enough to share with the IRS the same information. We decided to fight them in court. A decision I regret now. In the end, we lost and had to pay the entire cost of defense for us AND the IRS. We had to mortgage a mountain retreat property that was fully paid off OR give it to the IRS. I became an expert in what a LEGAL contractor is. I can tell you it would be extremely rare that a limo company could ever qualify. You might want to read more about just how far a big company like Fed Ex did as they battled and battled -

    http://www.forbes.com/sites/robertwo...ninth-circuit/

    You are playing WITH FIRE. The IRS has their sites set on our industry and many companies have been popped for this. Just be an employer and be normal.
    Jim A. Luff
    Forum Moderator
    Contributing Editor & Consultant - LCT Magazine

    Limousine Scene - An Award Winning Company Since 1990
    Bakersfield, CA
    Limousines, Sedans, Vans, Charter Buses, Limo-Buses, Wheelchair Vans www.limousinescene.com

  3. #18
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    Quote Originally Posted by Limo Scene View Post
    Yes, Andrew. There was a time back in 1990 when I too thought I could get away with the whole 1099 thing. It didn't bite me in the ass until about 1996 when a part-time driver lost her full-time job. In the course of filling out paperwork for unemployment they asked her to list ALL jobs in the past year. She listed our name. BOOM. We were ordered to pay payroll taxes with interest and penalties for the past 6 years to the State of Californian who was generous enough to share with the IRS the same information. We decided to fight them in court. A decision I regret now. In the end, we lost and had to pay the entire cost of defense for us AND the IRS. We had to mortgage a mountain retreat property that was fully paid off OR give it to the IRS. I became an expert in what a LEGAL contractor is. I can tell you it would be extremely rare that a limo company could ever qualify. You might want to read more about just how far a big company like Fed Ex did as they battled and battled -

    http://www.forbes.com/sites/robertwo...ninth-circuit/

    You are playing WITH FIRE. The IRS has their sites set on our industry and many companies have been popped for this. Just be an employer and be normal.
    I wonder how on earth so many companies get away with it. My biggest competitor not only doesn't do it legit but they give their drivers cash at the end of their trip.

  4. #19

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    Quote Originally Posted by brandon1 View Post
    I wonder how on earth so many companies get away with it. My biggest competitor not only doesn't do it legit but they give their drivers cash at the end of their trip.
    Most companies don't make enough money for it to warrant an IRS investigation. I had a co-worker previously that was an IRS agent in the 90s. He told me that they wouldn't even waste their time on you if they didn't think they could get over $60k from the case. Otherwise, it wasn't worth the time and effort. That was almost 20 years ago when he was there, so I don't know what the figure is now.

    My chauffeurs are paid and reported as employees. Yes, it's more expensive but it attracts and holds better quality people. I'm probably one of the very few companies (if not the only one) in the area that I operate in, to do so.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  5. #20
    Super Moderator Limo Scene's Avatar
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    Brandon - ** GASP ** Cash? Dirty, nasty, cash? It's only because they haven't had anything happen to trigger it. My trigger point was so innocent. Here's another thing....speaking of insurance. Let's say, one of these companies using I/C's has a driver in a major car accident while driving. Here's what will happen:

    Driver goes to the hospital and incurs ambulance bill, ER bill, radiology bill, doctor's bill etc.
    Limo Insurance tells driver and hospital......hey, we don't cover medical for the driver. Only paid passengers and the vehicle.
    Driver tells hospital it's a work related injury and should be covered by employer
    Hospital calls EMPLOYER who says, hey, I don't have a worker's comp policy. The driver has no coverage of any type through the company.
    Driver attempts to sue limo service to pay his medical bills, pays attorney, court costs etc. and loses because - HE IS INDEPENDENT!
    Driver files for bankruptcy

    You CAN do independent right. The driver must pay a rental amount for use of the car, purchase his own fuel and pay all his own expenses. Such as making a contract to say that a trip to an airport 2 hours away will cost ABC limo company $300.00. Of that, the driver will pay $35 for the use of the company car. He will fill it up with gas at the conclusion of the trip. He will have his own INDEPENDENT insurance to protect himself and the car.....like when you rent a car from Enterprise.

    But, WHY? Just be a normal employer.
    Jim A. Luff
    Forum Moderator
    Contributing Editor & Consultant - LCT Magazine

    Limousine Scene - An Award Winning Company Since 1990
    Bakersfield, CA
    Limousines, Sedans, Vans, Charter Buses, Limo-Buses, Wheelchair Vans www.limousinescene.com

  6. #21
    Senior Member LIMOJESS's Avatar
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    http://www.forbes.com/sites/ellenhue...ampaign=buffer

    Check out this artical between uber and a true I/C
    Last edited by LIMOJESS; January 15th, 2015 at 07:29 PM.

  7. #22
    Super Moderator gunny's Avatar
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    Some of the biggest con artists work in the limo industry. Why I laugh when they cry about Lyft/Uber or anyone else they don't feel are playing by some set of rules.
    Airport Limo Service Spring Hill, Brooksville, Citrus County FL
    http://gunnysairportlimo.com/tampa_a...ce_spring_hill

  8. #23
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    Quote Originally Posted by gunny View Post
    Some of the biggest con artists work in the limo industry. Why I laugh when they cry about Lyft/Uber or anyone else they don't feel are playing by some set of rules.
    I have gotten scammed by limo companies more times than I can count. Just yesterday I had a client charge back $850 for advertising and claim "card not present" which means since I didn't actually swipe the card but have a signed contract Amex will stick it to me. He sent me an email 6 hours after his credit card was ran on the 1st saying "don't run my card I have insufficient funds". I have no idea how someone can run a business and not have $850 to pay bills.

  9. #24

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    Quote Originally Posted by brandon1 View Post
    I have gotten scammed by limo companies more times than I can count. Just yesterday I had a client charge back $850 for advertising and claim "card not present" which means since I didn't actually swipe the card but have a signed contract Amex will stick it to me. He sent me an email 6 hours after his credit card was ran on the 1st saying "don't run my card I have insufficient funds". I have no idea how someone can run a business and not have $850 to pay bills.
    wow..

  10. #25

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    Hey do the owner/operator of the company required to have workers comp filing too?

  11. #26
    Super Moderator gunny's Avatar
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    Quote Originally Posted by brandon1 View Post
    I have gotten scammed by limo companies more times than I can count. Just yesterday I had a client charge back $850 for advertising and claim "card not present" which means since I didn't actually swipe the card but have a signed contract Amex will stick it to me. He sent me an email 6 hours after his credit card was ran on the 1st saying "don't run my card I have insufficient funds". I have no idea how someone can run a business and not have $850 to pay bills.
    Asides from falsely claiming employees as ICs and also screwing them out of righteous pay and OT. Examples of scams are pocketing cash jobs, providing false years of vehicles they are hiring out, bait and switching vehicles (esp with prom kids) and one of the best, charging clients for tolls, parking etc.. At the end of the year these extras are not claimed as income but the receipts are turned in for a deduction. Limo Ops are always running into IRS probs because they don't play by the law yet.... whaaaaa, Uber is fucking us. LOL !!!
    Airport Limo Service Spring Hill, Brooksville, Citrus County FL
    http://gunnysairportlimo.com/tampa_a...ce_spring_hill

  12. #27

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    Quote Originally Posted by gunny View Post
    Asides from falsely claiming employees as ICs and also screwing them out of righteous pay and OT. Examples of scams are pocketing cash jobs, providing false years of vehicles they are hiring out, bait and switching vehicles (esp with prom kids) and one of the best, charging clients for tolls, parking etc.. At the end of the year these extras are not claimed as income but the receipts are turned in for a deduction. Limo Ops are always running into IRS probs because they don't play by the law yet.... whaaaaa, Uber is fucking us. LOL !!!
    "charging clients for tolls, parking etc.. At the end of the year these extras are not claimed as income but the receipts are turned in for a deduction."

    I am not sure I understand what you mean by that? What's the problem with charging or itemizing tolls and parking which is an expense?

  13. #28
    Super Moderator Limo Scene's Avatar
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    It COULD be double dipping. You see, the client is the one paying for the tolls. NOT the limo company. But, the limo company will reduce their taxable income by claiming they had the expense of paying all these tolls as an operational expense. However, IF the income is properly reported to the IRS as income and then the expense is deducted it is a wash. The toll income less the toll expense = $0.00 revenue so there is no tax paid on it. There is nothing wrong with itemizing it as long as it is all recorded and reported properly.
    Jim A. Luff
    Forum Moderator
    Contributing Editor & Consultant - LCT Magazine

    Limousine Scene - An Award Winning Company Since 1990
    Bakersfield, CA
    Limousines, Sedans, Vans, Charter Buses, Limo-Buses, Wheelchair Vans www.limousinescene.com

  14. #29
    Super Moderator gunny's Avatar
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    Quote Originally Posted by metroguy2012 View Post
    "charging clients for tolls, parking etc.. At the end of the year these extras are not claimed as income but the receipts are turned in for a deduction."

    I am not sure I understand what you mean by that? What's the problem with charging or itemizing tolls and parking which is an expense?
    It means you collect for these items, pocket it, don't claim it but turn the receipts in as a business expense.
    Airport Limo Service Spring Hill, Brooksville, Citrus County FL
    http://gunnysairportlimo.com/tampa_a...ce_spring_hill

  15. #30

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    Quote Originally Posted by Limo Scene View Post
    Yes, Andrew. There was a time back in 1990 when I too thought I could get away with the whole 1099 thing. It didn't bite me in the ass until about 1996 when a part-time driver lost her full-time job. In the course of filling out paperwork for unemployment they asked her to list ALL jobs in the past year. She listed our name. BOOM. We were ordered to pay payroll taxes with interest and penalties for the past 6 years to the State of Californian who was generous enough to share with the IRS the same information. We decided to fight them in court. A decision I regret now. In the end, we lost and had to pay the entire cost of defense for us AND the IRS. We had to mortgage a mountain retreat property that was fully paid off OR give it to the IRS. I became an expert in what a LEGAL contractor is. I can tell you it would be extremely rare that a limo company could ever qualify. You might want to read more about just how far a big company like Fed Ex did as they battled and battled -

    http://www.forbes.com/sites/robertwo...ninth-circuit/

    You are playing WITH FIRE. The IRS has their sites set on our industry and many companies have been popped for this. Just be an employer and be normal.


    interview with David Seelinger, he did some touch up talks regarding IC operators and feds IRS coming after him etc etc. enjoy

    https://www.youtube.com/watch?v=CuWuHxGDhaM

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