If that is their attitude I would not say one more word to them and get an attorney. But I am not sure what is meant by "employment taxes." If they mean the taxes "withheld" from her paycheck never got to the IRS - yep. My understanding is that she would be on the hook for HER money. If your boss takes the money and never pays the IRS, you will owe it. Now I am basing this belief off of a Murder She Wrote episode I watched last week (DH is gone for a while). But I have no reason to believe the set-up story was not real. Although it was filmed in the 80s so things may have changed too.
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Re: Business questions