government question

its off topic, but figured i'd get your opinions on this issue/problem.

so we had a nanny work for us for 2 years. it was cash and we did no paperwork (nanny tax etc...)..
she now left and got married to her army boyfriend and now is applying for some govt job. we get something in the mail from the us government, asking to confirm if if she worked for us for 2 years as a nanny. (she must have listed us as her previous employer on the application)

now, if i don't reply...she might not get her job....i want her to get a job..she was nice and a good nanny...

if i do reply, any chance govt agencies share information, and i get busted for not reporting her as an employee (nanny tax and whatever else i was supposed to do)..

i am thinking most likely nothing will happen if i just send in the paperwork saying that she was our nanny..it does not ask about income..
i could always say she worked only 1 hour a month or she worked for free if ever asked?

any advice?
thanks

No idea whether or not gov agencies talk. Worse case, you'd be on the hook for income tax. If you paid her $40k/year you might owe $10k per year or something like that.

I highly doubt your lack of a reply will keep her from the job. Its not like entry level employees can make their last employer send a reference.

Is she really considered an employee? Wouldn't it be that you were using her as a service? That way she should have to pay her own taxes on her income. Like a 1099 contractor or something like that... It's not like you were writing her salary off as an expense.

Just like a guy mowing your lawn or a maid cleaning your house... You pay them for the service and they report everything that you pay them as income.

I'm no accountant so take this with a grain of salt and if you want to know the law, check with one, but I have a couple friends who have nannies and they have said the IRS has been cracking down on this and that you must withhold/pay the taxes if the Nanny is considered full time - whatever that is.

I think the difference is if you hire someone to mow your lawn once a week for 2 hours, he's not a full time employee. If you have a nanny as a live in or 40 hrs/week or 30 or whatever ( I dont know the cut off) then she's no longer a 1099.

Anyways, I dont know but I know a bunch of guys who have been paying their nanny taxes for 3-4 years.

Sean, you are right... I just read about it online and had no clue that you were liable to pay payroll tax.

The cutoff is 1700 bucks in a year. So if you paid less then that then you don't owe any payroll tax...

Her potential ass or your potential ass; you make the call. I simply wouldn't send anything back.