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Well then expect to have to pay his payroll taxes and fines. How can you have a subcontractor and no signed and digitally stored contract that spells how how he is paid and who is liable for taxes, insurance etc.. I apologize if this is harsh but that is like playing hot potato with a hand grenade. I've personally seen people I had the utmost of respect for professionally become the biggest tools in the shed over similar things. As far as your partner goes he's 50% liable so he may want to try a bit and I would encourage him to help out.
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