PUBLIC LEARNS AFTER ZOE BAIRD

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, April 12, 1993                   TAG: 9304120059
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-2   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
PUBLIC LEARNS AFTER ZOE BAIRD
A new company has turned Zoe Baird's name into a verb, and is trying to cash in on her troubles at tax time.
In ads warning "Don't be Zoed," the company, Nannies Plus of Silver Spring, Md., offers tax-preparation help for those who should be paying taxes for their household workers.
Not so surprising in the year when Baird's troubled nomination for attorney general drew attention to a tax law the Internal Revenue Service says millions routinely ignore.
Baird withdrew her name from consideration for attorney general after admitting she didn't pay Social Security taxes for her maid and chauffeur, who weren't legal residents. All over the country are others like her who don't pay taxes for housekeepers, baby sitters and other domestic help, the IRS says.
The law Baird broke - which dates back to 1950 - requires employers to pay Social Security and Medicare taxes for any domestic employee who earns more than $50 in three months.
According to the Bureau of Labor Statistics, 1.13 million people are employed in private homes. Many work in more than one home at a time. But only about 500,000 households file the required tax forms each quarter.
That's only a fraction of the several million people the agency believes should be reporting.
"Whether you plan to run for public office or just run your home with a clear conscience, get legal now," read the ads for Nannies Plus.
Getting legal isn't easy. There's a lot of paperwork involved. You have to file every three months, register for an identification number and fill out as many as a half-dozen forms.
Even the IRS admits there are problems.
"We've said that it is complicated, that it is quite a burden, that there are a number of reasons why it's difficult, and why people don't comply. We're in favor of simplifying the process," said IRS spokesman Ken Hubenak.
This year, as more people than usual express interest in complying, tax professionals are admitting confusion, too.
H & R Block tax preparers from around the country are calling in this year with questions, said Ruth Lancaster, a spokeswoman for the company's national office in Kansas City, Mo.
"We've definitely seen an increase in the number of questions about domestic help on our internal tax hot line," she said. "People need help just identifying those folks who are subject to the law and figuring out exactly who qualifies as an employee."
Under the law, an employer who pays a household worker more than $50 per quarter must pay 7.65 percent of the worker's wages in Social Security and Medicare taxes; the worker is liable for a matching amount.
If an employer pays a household worker $1,000 or more in a quarter, the employer also must pay unemployment taxes on the first $7,000 of wages paid to the worker each year.
The first quarterly deadline for this year's household-help filings is April 30.
The owners of Nannies Plus, Kathy Webb and Alan Heilbron, hope the complexity of the filing process will draw customers.
The company, which opened March 20, registers employers of domestic workers and takes care of the quarterly filings for as little as $35 a quarter. Webb and Heilbron believe the problem is common in an area full of government workers and dual-income families.
"We're both parents, we both have nannies, and we watched Zoe Baird on TV," said Webb. "We have many friends in the same situation, and our market research really started with cocktail conversations."
"Everyone's pulling their hair out about this," she said.

by Bhavesh Jinadra by CNB