The accountant had spoken.
Because of a complicated set of tax circumstances, it would be necessary
to change the status of my company from a Sub Chapter "S"
corporation to a regular "C" corporation.
This was a big deal. The "S"
corp gives you the protection of a corporate umbrella, but the profits or
losses flow directly to the shareholderís personal returns. In other
words, in my case it is a sole proprietorship with teeth.
The regular old "C" corp is
simply your standard corporate entity. The corporation pays the tax, and
any cash remaining after the government washes its greedy little hands can
be doled out to the shareholders in the form of dividends, which are then
taxed again on the personal return.
As a working shareholder, I can avoid
this double taxation by drawing a salary and, with luck, bonuses, which
are a pre-tax expense to the corporation.
So Iím going back on the payroll,
just like I was 14 years ago before I started my own business. Practically
speaking, it may not mean much. But psychologically, it can take a toll.
On the other hand, itís done wonders
for the morale of my office. When I told Ms. Ferguson, my loyal office
manager, that it would be necessary for me to become an employee of the
company, she initially didnít have much of a reaction.
I should have known better. The next
morning she came into my office and plopped an employee folder, a W-4 form
and an Employment Eligibility Verification (Form I-9) on my desk.
"Fill these out," she
I looked at the stack of papers.
"You forgot the employment application."
"I took the liberty of assuming
youíve already been hired," she replied. "Now I just want to
make sure youíre legitimate." She gave me her best "Dirty
Harry" look, which was pretty pathetic. "Besides, itís the
I sighed, knowing my sense of
individual freedom was fading by the milliseconds. I quickly filled out
the W-4, citing 27 dependents (who knows how many children a man really
has?) until Ms. Ferguson mentioned the IRS seems to have a pretty good
idea of my output.
After signing the W-4 (with a more
realistic withholding allowance), I turned to the I-9, the Employment
Eligibility Verification. "I really have to fill this out?" I
"Yes, you do," said Ms.
Ferguson. "Every employee must show proof they are eligible to work
in the United States. The I-9 must be on file in our office and shown to
the Immigration and Naturalization Service agents when they raid us."
"Iím an American!" I cried.
"Born and raised in San Francisco, California, U.S. of A."
She glanced nervously out the window,
perhaps looking for INS agents lurking in the shadows. "Prove
I pulled my driverís license out of
my wallet and pointed to my shining face and my address.
Ms. Ferguson studied my license and
actually scoffed. "It also says your hair is blond. Who are you
trying to kid?"
My hair was blond, 20 years ago.
"Well, my eyes are still blue. And
Iím still an American."
She shoved the form under my nose.
"A driverís license alone wonít do it. Do you have a
"It expired last year."
She sighed. "Thatís unfortunate.
However, it says right on the form you can show me a birth certificate or
an original Social Security card. Why donít you just hand me one of
those and weíll be done with it."
I was starting to sweat. "I, uh,
donít seem to have either of those. My God, give me a break. No one
carries their birth certificate around, and I havenít seen my Society
Security card since my college days."
"Thatís too bad," said Ms.
Ferguson, getting up to leave. "You had best call the Social Security
office and have them issue you a new card. Until then, Iíll have to
classify you as an illegal alien ineligible for employment."
"I am not an illegal alien!"
I cried. "Iím an American and I have the right to work at my own
Ms. Ferguson was unimpressed.
"Tell that to the INS agents when they raid our office and take you
away for improper documentation."
After she left, I decided she was
right. I was no different from any other employee. I had to have proof.
My days of complete independence
were over. I was an employee of a company, no more, no less. Feeling a
little low, I had no choice but to give myself a raise. Iíll need the
cash when Ms. Ferguson has me deported.