Wrong W-2 form, what recourse?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Wrong W-2 form, what recourse?

Post by lakpr » Thu Mar 14, 2019 1:14 pm

Hi folks,

Really asking for a colleague, single mother with two kids, and could use collective wisdom of this forum.

Last year, she quit her job and joined a competitor for better pay. She said she did NOT sign any non-compete agreement with the previous employer. The split had not been pleasant, unfortunately. She reports that the previous employer did not even pay her wages for the last month and half she had been with them. But she thought it'd be a good price to pay to get rid of the employer's abusive practices.

Come February, she received a W-2 form that shows nearly $22K in income more than what had been actually paid to her in 2018. This $22k in income WOULD have been the correct figure, had the employer accurately paid my friend for the last month-and-half.

She is now in a bind, not only did she not have the $22K, she's going to have to pay the taxes on this ghost salary for an additional $7k approximately (inclusive of state and federal taxes)

She's on a H-1 visa, which also plays into her reluctance to approach authorities, but with a question of nearly $30K, she will. But not sure who to approach, I don't know either, which is why we are turning to this forum for some guidance.

I have asked her to NOT file her taxes for now, file for an extension till October 15. She expects her tax liability to be smaller than what's been withheld from her paychecks, so there are no estimated payments to be made with the extension.

User avatar
HueyLD
Posts: 7234
Joined: Mon Jan 14, 2008 10:30 am

Re: Wrong W-2 form, what recourse?

Post by HueyLD » Thu Mar 14, 2019 1:20 pm

The IRS has specific procedures for your friend.

https://www.irs.gov/faqs/irs-procedures ... pt-omitted

“Question
I received an incorrect Form W-2. My former employer won’t issue me a corrected Form W-2. What should I do?

Answer
If by the end of February, your attempts to have the Form W-2, Wage and Tax Statement corrected by your employer are unsuccessful, you can request that an IRS representative initiate a Form W-2 complaint. Call the IRS toll free at 800-829-1040 or make an appointment to visit an IRS Taxpayer Assistance Center (TAC).

The IRS will send your employer a letter requesting that they furnish you a corrected Form W-2 within ten days.

The IRS will send you a letter with instructions and Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. You can use the Form 4852 in the event that your employer doesn't provide you with the corrected Form W-2 in time to file your tax return.
Depending on the time of year, the IRS may have federal wage information in the form of a wage transcript. See Topic 159 for more information on how to get a transcript of W-2 information.

When you call the IRS or visit a TAC office, please have the following information available:

Your employer's or payer's name and complete address including ZIP code, employer identification number if known (see your prior year's Form W-2 if you worked for the same employer), phone number, and

Your name, address including ZIP code, social security number, phone number, and dates of employment.

If you file your return and attach Form 4852, you’ll need to estimate the wages you earned, taxes withheld, and the period you worked for that employer. You should base the estimate on year-to-date information from your final pay stub, if possible. When filing a Form 4852 instead of a Form W-2, there may be delays processing your refund while we verify the information you gave us.

To help protect your social security benefits, keep a copy of Form 4852 until you begin receiving social security benefits, just in case there's a question about your work record and/or earnings in a particular year. After September 30 following the date shown on Form 4852 line 4, use a my Social Security online account or contact your local SSA office to verify wages reported by your employer.

If you receive a corrected Form W-2 after you filed your return with Form 4852, and the information differs from the information reported on your return, you must amend your return by filing Form 1040X, Amended U.S. Individual Income Tax Return.”

Best of luck to your friend.

rkhusky
Posts: 7604
Joined: Thu Aug 18, 2011 8:09 pm

Re: Wrong W-2 form, what recourse?

Post by rkhusky » Thu Mar 14, 2019 1:22 pm

Sounds like she needs a lawyer. Or at least, initially, the threat of hiring a lawyer.

Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Re: Wrong W-2 form, what recourse?

Post by lakpr » Thu Mar 14, 2019 1:32 pm

HueyLD, Thank you very much for your advice. Will share with my friend.

rkhusky, she did think about approaching a lawyer but also afraid that could take both time away from her current job, and perhaps additional money for lawyer retainer fee that she really does not have. She's been in the US for less than 2 years and obviously she does not have even 5K saved up, her previous employer's pay practices being a big contributor. It might come to that eventually, but wanted to see what she could do on her own at first.

User avatar
HueyLD
Posts: 7234
Joined: Mon Jan 14, 2008 10:30 am

Re: Wrong W-2 form, what recourse?

Post by HueyLD » Thu Mar 14, 2019 1:38 pm

It may be very difficult to get thru the toll free number during the tax season. Your friend may have a better chance going to an IRS office in person if feasible.

She should go ahead and file Form 4852 https://www.irs.gov/pub/irs-pdf/f4852.pdf as soon as possible.

Some employers who sponsor H1-B visa are downright criminal because they know that the vast majority of H1-B holders are afraid to complain.

TravelGeek
Posts: 3103
Joined: Sat Oct 25, 2014 3:23 pm

Re: Wrong W-2 form, what recourse?

Post by TravelGeek » Thu Mar 14, 2019 2:20 pm

lakpr wrote:
Thu Mar 14, 2019 1:32 pm

rkhusky, she did think about approaching a lawyer but also afraid that could take both time away from her current job, and perhaps additional money for lawyer retainer fee that she really does not have. She's been in the US for less than 2 years and obviously she does not have even 5K saved up, her previous employer's pay practices being a big contributor. It might come to that eventually, but wanted to see what she could do on her own at first.
She didn’t get paid for 1 1/2 months and that was a loss of $22k? And she can’t afford a lawyer?

I’d look for assistance from the relevant state agency to claim those missing $22k instead of worrying about the W-2 (file extension). E.g., in CA

https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm

Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Re: Wrong W-2 form, what recourse?

Post by lakpr » Thu Mar 14, 2019 2:36 pm

TravelGeek wrote:
Thu Mar 14, 2019 2:20 pm
She didn’t get paid for 1 1/2 months and that was a loss of $22k? And she can’t afford a lawyer?

I’d look for assistance from the relevant state agency to claim those missing $22k instead of worrying about the W-2 (file extension). E.g., in CA

https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm
She's an IT professional, yeah the $22K is about 6 weeks salary for her, not unheard of around here. She's quite talented at her skillset too.

Didn't I also mention that she's a single mom with two kids? Have you looked at what child care for two kids cost around metro NY region?

She's been in the country for less than 2 years; between amounts required for apartment rental deposits (2 months rent in advance!) and child care costs, why is it difficult to believe she's not had $5K saved up?

It's not that she cannot afford a lawyer, not in the sense of a single mom making $12 an hour being able to afford one. It's that she does not have, *yet*, enough savings to go full bore legal on her ex-employer, she's hesitant at the time demands it might place on her, and wants to see what can be done before she does take that drastic step.

User avatar
TheTimeLord
Posts: 6294
Joined: Fri Jul 26, 2013 2:05 pm

Re: Wrong W-2 form, what recourse?

Post by TheTimeLord » Thu Mar 14, 2019 2:45 pm

Under the Fair Labor Standards Act, the federal law that governs the payment of wages, an employer must pay its employees wages for all hours worked. An employer that fails to do so owes the employees the amounts that remained unpaid. Seems obvious enough – you have to pay your employees.

If, however, the employer’s failure was “willful” – in other words, voluntary, deliberate, or intentional, and more than merely negligent – “liquidated” or double damages are owed. Lots of courts have parsed the term “willful” to determine what it means in practice, but essentially the test is met when the employer knew it was violating the FLSA, or when the employer was recklessly disregarding whether there may be a violation of the FLSA. It is not necessarily a difficult burden for an employee to show willfulness. Most courts will presume the employer’s violation was willful and the employee is entitled to liquidated damages unless the employer can show it acted in good faith.
https://quirkyemploymentquestions.com/w ... alf-right/
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

TravelGeek
Posts: 3103
Joined: Sat Oct 25, 2014 3:23 pm

Re: Wrong W-2 form, what recourse?

Post by TravelGeek » Thu Mar 14, 2019 2:55 pm

lakpr wrote:
Thu Mar 14, 2019 2:36 pm
TravelGeek wrote:
Thu Mar 14, 2019 2:20 pm
She didn’t get paid for 1 1/2 months and that was a loss of $22k? And she can’t afford a lawyer?

I’d look for assistance from the relevant state agency to claim those missing $22k instead of worrying about the W-2 (file extension). E.g., in CA

https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm
She's an IT professional, yeah the $22K is about 6 weeks salary for her, not unheard of around here. She's quite talented at her skillset too.

Didn't I also mention that she's a single mom with two kids? Have you looked at what child care for two kids cost around metro NY region?

She's been in the country for less than 2 years; between amounts required for apartment rental deposits (2 months rent in advance!) and child care costs, why is it difficult to believe she's not had $5K saved up?
So she is making a good salary, and yet an extra $22k would be a lot of money for her if she doesn’t have even $5k saved.

So I don’t quite understand why she would write off the money the former employer owes her. I would fix that problem, not the W-2 problem. And if the former employer gets in trouble with the feds/state - even better. W-2s usually don’t get filled out by hand - payroll software or services providers like ADP produce them from payroll records. If they accounted for the money as having been paid to her, but she never received it, the question is - who got it instead?

Here’s the link for New York State: https://www.labor.ny.gov/workerprotecti ... lwage.shtm

User avatar
BolderBoy
Posts: 4471
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Wrong W-2 form, what recourse?

Post by BolderBoy » Thu Mar 14, 2019 3:39 pm

rkhusky wrote:
Thu Mar 14, 2019 1:22 pm
Sounds like she needs a lawyer. Or at least, initially, the threat of hiring a lawyer.
+1. The H-1 visa comment was the giveaway for this being the correct action.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

User avatar
RickBoglehead
Posts: 5023
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Wrong W-2 form, what recourse?

Post by RickBoglehead » Thu Mar 14, 2019 3:41 pm

I'm sure the State of NY would be happy to hear of the withheld pay...
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Re: Wrong W-2 form, what recourse?

Post by lakpr » Thu Mar 14, 2019 4:07 pm

TravelGeek wrote:
Thu Mar 14, 2019 2:55 pm
lakpr wrote:
Thu Mar 14, 2019 2:36 pm
TravelGeek wrote:
Thu Mar 14, 2019 2:20 pm
She didn’t get paid for 1 1/2 months and that was a loss of $22k? And she can’t afford a lawyer?

I’d look for assistance from the relevant state agency to claim those missing $22k instead of worrying about the W-2 (file extension). E.g., in CA

https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm
She's an IT professional, yeah the $22K is about 6 weeks salary for her, not unheard of around here. She's quite talented at her skillset too.

Didn't I also mention that she's a single mom with two kids? Have you looked at what child care for two kids cost around metro NY region?

She's been in the country for less than 2 years; between amounts required for apartment rental deposits (2 months rent in advance!) and child care costs, why is it difficult to believe she's not had $5K saved up?
So she is making a good salary, and yet an extra $22k would be a lot of money for her if she doesn’t have even $5k saved.

So I don’t quite understand why she would write off the money the former employer owes her. I would fix that problem, not the W-2 problem. And if the former employer gets in trouble with the feds/state - even better. W-2s usually don’t get filled out by hand - payroll software or services providers like ADP produce them from payroll records. If they accounted for the money as having been paid to her, but she never received it, the question is - who got it instead?

Here’s the link for New York State: https://www.labor.ny.gov/workerprotecti ... lwage.shtm
She's timid by nature, I have seen that with my limited interactions with her. She simply did not want to rock the boat, that she's on a temporary work visa in this country must have been playing on her mind. She's from that country that gave the word apartheid to the world; perhaps that's also part of it.

Your comment about payroll software running the W-2 forms from payroll records sounds true -- as I mentioned in my first post, she did say that the amount WOULD have been correct had she been paid for the last 6 weeks of work. It's likely the employer may have suppressed the distribution of funds to her after the acrimonious split, I am just guessing.

Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Re: Wrong W-2 form, what recourse?

Post by lakpr » Thu Mar 14, 2019 4:11 pm

As of now, I have passed on the suggestions of filing Form 4852 with the IRS to my friend. I have also gave her the suggestion that this board recommends hiring a lawyer if she wants to settle it quickly.

inverter
Posts: 175
Joined: Mon Jul 27, 2015 1:40 pm

Re: Wrong W-2 form, what recourse?

Post by inverter » Thu Mar 14, 2019 4:12 pm

She needs to go after the original wages. I would help her attend a meeting with a lawyer.

adam1712
Posts: 432
Joined: Fri Jun 01, 2007 5:21 pm

Re: Wrong W-2 form, what recourse?

Post by adam1712 » Thu Mar 14, 2019 5:05 pm

lakpr wrote:
Thu Mar 14, 2019 4:11 pm
As of now, I have passed on the suggestions of filing Form 4852 with the IRS to my friend. I have also gave her the suggestion that this board recommends hiring a lawyer if she wants to settle it quickly.
I would be careful about filing the IRS form for an incorrect W2 as that could suggest she thinks the lower payment was correct. S

he should consider contacting the Empire Justice Center if they are close or I'm sure there are other lawyers that work with immigrants and employees. She really has nothing to fear talking to a lawyer. They have an ethical duty to protect her immigration status and many lawyers in this area are definitely on her side. And they will be clear about the costs but I'm sure they can work something without needing a large initial fee with $22k on the line.

Thesaints
Posts: 2921
Joined: Tue Jun 20, 2017 12:25 am

Re: Wrong W-2 form, what recourse?

Post by Thesaints » Thu Mar 14, 2019 5:11 pm

In her shoes I'd rather get a correct salary than a correct W-2. She shouldn't have any qualms in contacting authorities, provided she got her H1-B in the proper fashion and satisfies its requirements.

TropikThunder
Posts: 1866
Joined: Sun Apr 03, 2016 5:41 pm

Re: Wrong W-2 form, what recourse?

Post by TropikThunder » Thu Mar 14, 2019 5:14 pm

inverter wrote:
Thu Mar 14, 2019 4:12 pm
She needs to go after the original wages. I would help her attend a meeting with a lawyer.
+1. They have lawyers. I envision the prior employer dragging their feet correcting the W-2 by saying it accurately reflects what she was paid, and then she will have to provide proof that they did not in fact pay her that last $22k.

Them: We paid you $100,000
Her: No, you never paid me the last $22,000 so it was only $78,000
Them: We paid you $100,000

Even if she has her last pay stub (say through mid-June) showing year to date, what's to stop them from saying "No, we paid her through the end of July"? How do you prove something didn't happen?

Thesaints
Posts: 2921
Joined: Tue Jun 20, 2017 12:25 am

Re: Wrong W-2 form, what recourse?

Post by Thesaints » Thu Mar 14, 2019 5:20 pm

TropikThunder wrote:
Thu Mar 14, 2019 5:14 pm
inverter wrote:
Thu Mar 14, 2019 4:12 pm
She needs to go after the original wages. I would help her attend a meeting with a lawyer.
+1. They have lawyers. I envision the prior employer dragging their feet correcting the W-2 by saying it accurately reflects what she was paid, and then she will have to provide proof that they did not in fact pay her that last $22k.

Them: We paid you $100,000
Her: No, you never paid me the last $22,000 so it was only $78,000
Them: We paid you $100,000

Even if she has her last pay stub (say through mid-June) showing year to date, what's to stop them from saying "No, we paid her through the end of July"? How do you prove something didn't happen?
I'm pretty sure the burden of proof would be on the company to have paid her in full.

Buford T Justice
Posts: 30
Joined: Mon Dec 15, 2014 5:33 pm

Re: Wrong W-2 form, what recourse?

Post by Buford T Justice » Thu Mar 14, 2019 6:00 pm

In addition to the above information, If she has her (real) last wage and earnings statement, I would use that for her 2018 calendar year filing with an attachment explaining the discrepancy

miamivice
Posts: 2196
Joined: Tue Jun 11, 2013 11:46 am

Re: Wrong W-2 form, what recourse?

Post by miamivice » Thu Mar 14, 2019 6:26 pm

TropikThunder wrote:
Thu Mar 14, 2019 5:14 pm
Even if she has her last pay stub (say through mid-June) showing year to date, what's to stop them from saying "No, we paid her through the end of July"? How do you prove something didn't happen?
As part of that $22,000, a significant amount of taxes would be paid to the IRS. The IRS would know if they received taxes from the employer for that income.

It would be bizarre if the employer paid FICA and federal income tax on that $22,000 but opted not to give the remainder to the employee.

NMBob
Posts: 253
Joined: Thu Apr 23, 2015 8:13 pm

Re: Wrong W-2 form, what recourse?

Post by NMBob » Thu Mar 14, 2019 8:01 pm

if you are originally trying to avoid attorney fees and perhaps not want to file the issue with the IRs yet, then ask the former employer to pay you. Then if they don't pay you or alter the w-2, as some suggested, then contact your state government labor department and present them with the issue. I would think you need to ask the former employer first, so you can tell the state labor folks, yes, I contacted them and ask for corrections to be made and they have not. Usually in anything, you can't just go to some higher level without first asking the business or company to fix it first. The higher ups almost always ask, what happened when you asked them to fix it...you have to say you have pointed the issue out to them, and they have then failed to address it for you. You first have to try to get something fixed at the lowest level possible.

If it goes that far, hopefully you had direct deposit and can show bank statements with the deposits and then without the deposits. This would then require the employer to prove where that money went since it didn't direct deposit to your account.

Topic Author
lakpr
Posts: 3101
Joined: Fri Mar 18, 2011 9:59 am

Re: Wrong W-2 form, what recourse?

Post by lakpr » Wed May 22, 2019 6:05 pm

An update. My friend received her missing pay after some not so friendly conversations back and forth with her ex employer, thankfully without having to retain a lawyer. Following my initial advice, she filed for an extension for her taxes, with both IRS and State of NY. She is glad to have this resolved and put it behind her.

Post Reply