Undocumented alien satisfactorily reports income to IRS

Under Florida law, the reporting requirement for wages is satisfied when the employee files a tax return informing the IRS of wages he earned with the employer he was working for when he was injured.

Case name: Rene Stone Work Corp. v. Gonzalez, No. 1D09-3271 (Fla. 1st Dist. Ct. App. 01/25/10).

Ruling: The Florida District Court of Appeal affirmed a judge of compensation claims' finding that the worker had an average weekly wage of $290.

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What it means: Under Florida law, only wages that have been reported for federal income tax purposes may be calculated towards an average weekly wage. The reporting requirement is satisfied when the employee files a tax return informing the Internal Revenue Service of wages he earned with the employer he was working for when he was injured, even though he may not have complied with the precise IRS provisions applicable to his tax situation.

Summary: A worker underwent an amputation after his leg was crushed. He did not have a Social Security number or a work visa, and was not a resident alien or citizen. The worker testified that he had worked for three employers but never reported his earnings to the IRS. However, he was in the process of filing his income taxes for 2008 for his last employer. An accountant testified that he filed a tax return and an application for a taxpayer identification number for the employee. The carrier argued that the worker's AWW was zero because he failed to report earned wages. The carrier also contended that the worker was required to comply precisely with IRS provisions given his tax and immigration status. The District Court determined that Florida's law does not require the level of precision urged by the carrier. The court concluded that although the law requires that the worker show he reported his wages for federal income tax purposes, the worker timely filed a tax return and informed the IRS of the wages he earned with the employer for whom he was working when he was injured.

The worker was paid $58 a day in cash, or $290 per week. The employer did not provide him with a W-2 form, and therefore the accountant advised the worker to file certain self-employment and other tax forms to report his income. The accountant stated that by filing a tax return, the worker had "reported his income to the federal government as the term ?reported' is generally understood in the accounting and tax-preparing community." The court rejected the argument that the law requires the worker to be knowledgeable about the IRS tax code and tax regulations to the technical degree suggested by the carrier when "reporting" earnings.

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March 15, 2010

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