I quit the restoration shop.

They can, technically.

The thing is, this isn't going through the IRS. Its going through the DOL, so its an investigation thing, not necessarily an audit by the IRS.

The problem is that if they see a continued paycheck trail from the same exact source with a W2 filed, they will investigate prior 1099 years and risk the fines.

That's why it cost me my job. I could do it, but without the DOL knowing would be nearly impossible at this point, after the IRS looking in to my personal taxes, it would raise a red flag and my employer would still be looking at risking the fines.

We could do it, but my employer would be sticking his neck out, risking investigation from the DOL.

I'm current on my taxes, even thought they are technically wrong. I'm not looking at any penalties. The DOL would be after my employer.