W2 Situation?

[dan doshan]

Another what would you do? Clients (married) worked for a business that went Kaput. Owner a sleazeball and will probably end up in jail. They did get W2's that were incorrect .. overstated by around 2000 dollars each as the owner never paid them or any of the other employees for their last several weeks of work but apparently the book amount was included on the W2's. The business is a mess, no one taking any responsibility anymore. They will never get corrected W2's.

Would you use the no doubt about it incorrect W2 amount which overstated their income or use a substitute W2 using their last year to date pay stub that accurately reflected what wages they actually received.

Just love doing taxes.

[BP.]

Looks like you're on the right track with a substitute W-2. Details here:

http://www.irs.gov/taxtopics/tc154.html

"Topic 154 - Form W-2 and Form 1099–R (What to Do if Incorrect or Not Received)

If you do not receive your Form W-2 or Form 1099-R by January 31st, or your information is incorrect, contact your employer/payer.

If you do not receive the missing or corrected form by February 14th from your employer/payer, you may call the IRS at 800–829–1040 for assistance. You must provide your name, address (including zip code), phone number, Social Security Number, dates of employment, your employer/payer's name, address (including zip code), and phone number. The IRS will contact the employer/payer for you and request the missing form. IRS will also send you a Form 4852 (PDF), Substitute for Form W-2 or Form 1099-R, along with a letter containing instructions.

If you do not receive the missing form in sufficient time to file your tax return timely, you may use the Form 4852 to complete your return. If you receive the missing or corrected Form W-2 or Form 1099-R after you file your return and a correction is needed, use Form 1040X (PDF), Amended U.S. Individual Income Tax Return. For additional information on filing an amended return, refer to Topic 308."

[Uncle Sam]

W-2

I would use the substituted W-2 for both spouses.
(I forget the form #, but I think it's Form 4872), where you enter information
as correct as you can possibly make it in lieu of actual W-2.

[dan doshan]

I knew that about the W2 but guess I never read it thoroughly enough to notice the same held for an incorrect W2. Thanks for the reminder.

[taxea]

Another what would you do? Clients (married) worked for a business that went Kaput. Owner a sleazeball and will probably end up in jail. They did get W2's that were incorrect .. overstated by around 2000 dollars each as the owner never paid them or any of the other employees for their last several weeks of work but apparently the book amount was included on the W2's. The business is a mess, no one taking any responsibility anymore. They will never get corrected W2's.

Would you use the no doubt about it incorrect W2 amount which overstated their income or use a substitute W2 using their last year to date pay stub that accurately reflected what wages they actually received.

Just love doing taxes.

Do you have documentation that proves the W-2 income was overstated? If so I would do a substitute W-2 based on your documentation and then I would explain in detail why this was done. The sub-W-2 should trigger an IRS investigation of the employer.