Refund Prob, W-2 Correction

[geekgirldany]

I posted before about how a client filed a W-2 that showed Federal & State Withholding... this was on his wages. Well he never did file the 941 until I asked him about it in April. Decided to correct the W-2 to show no federal or state withholding. And he filed the 941 for 4th Qtr 05 paying on social secuirty/medicare on his salary.

Problem comes in that I efile their return. They have now received a refund check showing a larger refund. Comes from the incorrect W-2. So now instead of $2000 refund it is a $5000 refund. Thankfully they have not cashed the check and I got a 8821 to call the IRS.

I wonder what the IRS will recommend to do about this? I hate for them to cash the check then turn around and pay penalities and interest on the payroll taxes. Just thought would help to talk this through.

[Jiggers]

Fraudulent W-2

I would ask the client if he knew the penalty for filing a fraudulent W-2 and for filing a tax return with a fraudulent W-2.

Then I would fire him as a client and let him worry about the penalties and interest.

[geekgirldany]

I apologize. I guess I didn't explain correctly.

I am the one that suggested to correct the W-2 so he would not have to pay the payroll penalities. They are going to owe anyways because the 4th qtr 05, 941 form was not filed or paid on time. I thought this would be better so there would be no penalities or interest on the federal withholding just social security.

I prepared a corrected W-2 and filed the income tax return accordingly. No Federal or state withholding for his W-2. I thought the refund would come back as I showed on the return. I guess what happened is the IRS matched up the W-2s. They saw the original not corrected. I hope what I suggested was not fradulent. I was just trying to correct an error and help them.