The Losses Keep Mounting

More than $8.4 billion a year is lost to Construction Industry Tax Fraud! Watch the losses climb, from Jan. 1, 2017 to now. 

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Why I’m Fighting Against Tax Fraud

By Dana Nessel
Michigan Attorney General

Tax Day 2021 is right around the corner, and we at the Michigan Department of Attorney General want you to know why fighting misclassification and unreported wages is so important. 

Government agencies rely on tax revenue to provide essential services.  These services include helping our neighbors with putting food on the table or keeping a roof over their heads.  When employers report all wages of their employees, these services are more easily funded and can reach more families. 

But state and federal governments lose many tens of millions of dollars every year when employers make you, the worker, invisible to taxing authorities.  Not so concerned about the government, you say?  Well, you’re being cheated too.  You work hard, and you deserve full credit for your efforts.  By calling you an independent contractor or not reporting your wages:

  • You’re paying an additional $76.50 for every $1,000 in taxable income each year;
  • You won’t be covered by a workers’ compensation policy if you’re injured;
  • You won’t be eligible for unemployment benefits if you’re fired; and
  • You can’t get help from the state to recover unpaid wages. 

In addition to being cheated while working, here’s the real surprise: these dishonest employers aren’t reporting your wages to the Social Security Administration, which may reduce or totally disqualify you from benefits in retirement.  These forms of wage theft are silently hurting families all over the country. 

The actions of dishonest employers are unconscionable and continue even during the COVID-19 pandemic when so many are struggling.  These shameless employers must be stopped.  You don’t need to be a victim on April 15 or in retirement.  Please, report suspected tax fraud before it’s too late.

In 2019, Michigan Attorney General Dana Nessel took part in the Michigan Regional Council of Carpenters Tax Fraud Day of Action event to announce establishment of a state Payroll Fraud Enforcement Unit in her office. She has pledged to strengthen whistleblower protections for employees who report wrongdoing and toughen penalties against payroll fraud. Visit AG Nessel’s Payroll Fraud information webpage.