THis is not a tax matter at this point. It's a legal matter. You REALLY need to seek the services of a lawyer or other legal counsel in your local jurisdiction. That employer is blatantly breaking the law, and they're probably done so to the point of it being a criminal offence, and not just a civil offense. But I'm not a lawyer. So for now, don't worry about your taxes. Find a lawyer before close of business Friday. If what you're posting here is even halfway accurate, I'd think the lawyers would be scrambling to jump all over this and represent you.
