I was just issued a subpoena to appear at a deposition with financial records showing any monies paid to, and health insurance provided for an employee (wink, wink) provider from 2004. Seems she is going after a "boyfriend" for child support, and he wants me to provide the info in the deposition. Now the IRS only requires me to keep records for three years, so can I say the records no longer exist? There is no wrongdoing or culpability on my part. Should I just provide the records? Or do I have any choice?

-- Modified on 5/6/2009 4:24:16 PM

Having said that, my advice would be to retain an attorney and have him or her quash the subpoena. I wouldn't say the records no longer exist if they do. A deposition is under oath and penalty of perjury. And I've seen District Attorneys prosecute people for perjury in a deposition.

expose myself to in that situation.

Hire an attorney.

must obey or can be held in contempt of court.
And a failure to testify truthfully raises the possibility of a perjury charge, although LE rarely takes this step against third party witnesses in civil cases.

  If a subpoena is properly served and issued (two seprate issues) , the only option is to discuss with your atty whether any other grounds exist to quash it and the firt question to discuss is whether the Fifth Amendment could be properly raised.

       Pleading the Fifth does not always excuse the witness from attending the depo but may provide grounds to refuse to answer questions; and if the other atty is informed he may cancel the depo and doument prodution.


There are, however, consequences to takng the Fifth that a witness should discuss with his atty and there are also waiver issues to watch out for.

Hire an attorney.

(still not a lawyer)

If you make a mistake on your tax return you have three years to fix it. 2008 return due date was April 15 2009 so if you missed something and want to get more money in your refund you have until April 15, 2009. Also the IRS has the same three year period to find a non-fraudulent mistake.
I don't think this rule applies to your situation.

Pleas refer to IRS Publication 552

I agree that you should retain counsel.  However, I see no reason to think you can have the subpoena quashed.  Having something to hide does not mean you are entitled to hide it.  There may be some basis for a motion to quash, but there probably isn't.  Nothing in your question suggests that there is.

what he could do is file a motion for a protective order precluding any questions at the depo that might incriminate him on Fifth Amendment grounds. This might discourage the opposing atty from proceeding as it raises the cost of litigation.

         The problem with this approach is that the answer to the question " did you give her money" would probably not be privileged, although the question "why did you give her money" certainly would be." But if he could somehow argue that the first question also falls within the privilege he could knock out the heart of the depo and might discourage the atty from proceeding.

to her attorney to argue the facts to her benefit.

You may want to consult with your attorney, but ultimately, you are just a witness.  Tell the truth.

Copied and pasted from irs website (see link for source)

As far as telling the truth, you're best bet is to not recall. "I am not sure, I don't remember, I don't know, I can't recollect for certain"


Recordkeeping
Keep all records of employment taxes for at least 4 years. These should be available for IRS review. Your records should include:

Your employer identification number (EIN),

Amounts and dates of all wage, annuity, and pension payments,

Amounts of tips reported to you by your employees,

Records of allocated tips,

The fair market value of in-kind wages paid,

Names, addresses, social security numbers, and occupations of employees and recipients,

Any employee copies of Forms W-2 and W-2c that were returned to you as undeliverable,

Dates of employment for each employee,

Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them,

Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V),

Copies of employees' Earned Income Credit Advance Payment Certificates (Forms W-5 and W-5(SP)),

Dates and amounts of tax deposits that you made and acknowledgment numbers for deposits made by EFTPS,

Copies of returns filed, including 941TeleFile Tax Records (discontinued after June 2005) and confirmation numbers, and

Records of fringe benefits and expense reimbursements provided to your employees, including substantiation.

I don't know about the statutes in your state, but you're looking at federal charges if you provide proof you paid and insured an escort who obviously wasn't employed by you.

Why do men get themselves in these situations, sigh

money laundering is one charge I think you qualify for.
I could do more research, but you shouldn't listen to me... talk to a lawyer.  

My advise, never give out proof you did something stupid that could end you behind bars.

Why would he be entitled to a protective order?  Those orders are available to protect interests which the law considers both legitimate and important.  The desire to avoid admitting to a crime doesn't qualify.  If he doesn't want to admit criminal conduct, he can invoke the Fifth Amendment.  That's what it's for.  No court would ever issue a protective order to spare someone from doing that.

And just what privilege are you "certain" would apply to questions about payments from a business to a supposed employee who is really a provider?  There is no employer-employee privilege, nor is there one for providers and clients.  I don't see any privilege that would even arguably (much less "certainly") apply in this situation.

“Why would he be entitled to a protective order?  Those orders are available to protect interests which the law considers both legitimate and important.  The desire to avoid admitting to a crime doesn't qualify.”  

What? You are simply mistaken on this point. The Fifth Amendment right against self incrimination –the only privilege I am talking about  - is certainly a privilege which may be raised by  motion for protective order in civil litigation both to bar deposition questions and shield documents that are incriminating on their face or incriminating by virtue of the act of production:

“The Fifth Amendment protects a person against being incriminated by his own compelled testimonial communications (see Fisher v United States, 425 US 391 [1976]). The privilege does not extend to the compelled production of incriminating documents unless the individual asserting the privilege was compelled to create the document (see Fisher v
United States, supra; see also People v Slavin, 1 NY3d 392, cert denied 543 US 818 [2004], citing United States v Hubbell, 530 US 27 [2000]). However, while the contents of documents generally are not protected by the privilege, the act of producing the documents may be protected when it is found to have communicative aspects (see Fisher United States, 425 US at 410). If the act of production doctrine applies, an individual may rely on the protection of the Fifth Amendment to withhold both personal and corporate documents in his possession (In re Grand Jury Subpoena Duces Tecum Dated Oct. 29, 1992, 1 F3d 87 [1993], cert denied sub nom. Doe v United States, 510 US 1091 [1994])."

IN RE ASTOR, 21 Misc.3d 400 (NY 2008)(considering the showing by each party to determine whether to issue a protective order to preclude production of documents allegedly privileged by the Fifth).

Now the OP says the payments were for a “provider employee (wink wink)” but he has done no wrongdoing. What does that mean? Okay, it is a legitimate payment to the employee for salary and health insurance he has no problems and he should just produce without delay. But if the payments were for sexual services rendered or hush money, he has big criminal and civil exposure.

    Once he picked up the phone to call her or email her to tell her this, he violated the Travel Act, a federal felony. Meanwhile his company is going fire him and he is subject to civil liability to his company and possible criminal prosecution if used company funds to pay a sex worker. If one of the documents contains a notation that he raised her salary to pay for an extra weekly date, the clueless atty who failed to raise privilege here would soon be seen contacting his malpractice carrier.


     I think you are also overlooking the strategy aspects of this kind of motion. This is a low dollar case and the boyfriend's atty is not going to want to spend a lot of money litigating this. So file the motion, and if its denied, file a interlocutory appeal (yes you can do that is most states). Then you have leverage to force some kind of settlement.

I agree that the Fifth Amendment protects Mcduff from revealing this information.  The fact that he already has this protection is why he can't justify a protective order.  Such an order can spare him from revealing what he would otherwise have to reveal, but it can't spare him from saying that the reason he won't reveal information is that the Fifth Amendment says he doesn't have to.  

Besides, to seek a protective order he would have to file papers with the court explaining that he is invoking the Fifth Amendment.  He would also have to serve these papers on opposing counsel.  The papers would thus reveal the very information you say he shouldn't have to reveal.  He could not get around this by filing the motion under seal, since a sealing order would protect only the information he wants to keep private and not his legal arguments about why he should not have to reveal it.

Another problem is that, if Mcduff works for a corporation, his desire to protect his own interests would not justify opposing a subpoena served on the corporation.  Corporations have separate legal existences.  His employer may want this information revealed even if he wants to keep it quiet.  Maybe THEN he would be able to get a protective order so that he could stay quiet about things the employer would need him to reveal.  But such an order would not allow him to conceal corporate records, which are not his to reveav or hide in the first place.

As for the point you make about costs, I think the smartest way to proceed would be to show up at the depo, invoke the Fifth Amendment and let the other side bring a motion to compel.  That would take the onus - and the more expensive part of the battle - off Mcduff's shoulders and place it on his opponents'.