I'm a freelancer and many times I simply outsource or hire a subcontractor (all ghost subcontractors) from like UpWork to do what my clients' ask from me. My clients generally do not know that I outsource my tasks, and they think that they are just simply hiring me.
Obviously, if they find out, they might decide to not work with me anymore, but on the legal aspect, would this count as some sort of employee fraud? If the work I submitted to the client damaged relationships with their clients due to the lack of quality from my subcontractor, would I take legal responsibilities?
Lastly, I believe this outsourcing can be deducted as business expenses when doing taxes. However, this might lead to that business expense being somewhat high. If the IRS founds out about this, would that cause any problems?