Richard Hatch and the IRS, Redux

Richard Hatch backed out of a deal with the IRS. There was a radio report that he claimed that IRS never told him how much taxes he needed to pay on his winnings. But in this report:

"Hatch’s lawyer, Michael Minns, told AP Radio that under California law, Hatch should have been classified as a CBS employee and therefore CBS was responsible for withholding taxes from his winnings.

“He was under the impression that they were either going to withhold from the check or pay the tax, and apparently neither occurred,” Minns said."

This seems weird to me. If you win the lottery, everyone knows that taxes come out of the face amount of the prize. If he was an employee (not really, because the payment went to a company, not him personally), then the check wouldn't say $1M.