I babysat my nephew in my home for a total of $6600 ($150/week for 44 weeks). I have children of my own, so I filed taxes as self-employed and paid the self-employment tax. I am supposed to still receive a refund even after paying the selfemployment taxes. Now I received a letter to verify my identity. My question is... Will my sister-in-law get in trouble for not claiming me as an employee? I've tried researching online, to no avail. I know she filed her taxes before me and did NOT claim the child care credit because she paid me cash and had no record. When I reply to the irs, will they need her information and will she be charged with tax evasion (even though I am paying the taxes now)?
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