W2c mess

[kathyc2]

I have a mess with a W2c that IRS says was not received. This is from a 2014 return. Client was receiving disability benefits and the original W2 added the net amount to Box 1 wages, then employer discovered the error that FIT had been withheld from benefits and issued a W2c increasing Box 1 wages and FIT withholding by 2,500.

I had the W2c prior to preparing return, so return was prepared using the corrected info. In Sept 2016 client received notice that they had a balance due rather than a refund. I contacted on priority line and verified that it was due to IRS not having W2c.

Employer uses a payroll company and the W2c was handwritten by employer, so there may have been confusion and the gov't copy was not submitted. Agent told me to send in W2c along with letter from employer on letterhead that they did indeed issue W2c to clear up the matter.

This was done but client received letter saying that this was not sufficient. Employer sent (resent?) Wc2 in Jan 2017 and it is still not showing in IRS records. E-mail from employer yesterday says that when they contacted SS in Jan that they were told to send the W2c to local office and that it might take 6 months to a year to be recorded!!

Does anyone have an idea of what I can do further to get this resolved?

On another note, agent from business division told me that they won't receive 2016 data from SSA until August this year. WTH was the point of moving the due date up from Feb to Jan if they still don't have info before 1040's are processed?

[Burke]

This was done but client received letter saying that this was not sufficient. Employer sent (resent?) Wc2 in Jan 2017 and it is still not showing in IRS records. E-mail from employer yesterday says that when they contacted SS in Jan that they were told to send the W2c to local office and that it might take 6 months to a year to be recorded!!

Exactly what did the letter say the TP was to do? I am of the opinion that the original agent's instructions would have been entirely sufficient to resolve the matter. I would respond to the letter and raise Cain.
Or go to Practitioner's hotline. It is not the TP's fault it takes them 6 months to update the records.

[kathyc2]

Exactly what did the letter say the TP was to do? I am of the opinion that the original agent's instructions would have been entirely sufficient to resolve the matter. I would respond to the letter and raise Cain.
Or go to Practitioner's hotline. It is not the TP's fault it takes them 6 months to update the records.

Letter said we have received your correspondence and W2c but since we can't verify with SSA we can't process.

I always go through the practitioner line. They used to be very good, but not so in the last couple of years. Yesterday the guy told me that the letter I wrote back in Nov that was then denied was not even in the file. Asked if I were to take info to local office if they could get it fixed and he said they can't do any more than phone line. Asked to speak to a manager and he said they couldn't do anything either. Unfortunately, I didn't write down his ID number when he rattled it off.

It gets even worse. Even without the add'l withholding, they should have received a refund of $4. The first agent I spoke with last fall could not tell me how they came up with a balance due of ~200. A couple weeks later I called back and that agent figured out that when they adjusted the return to match their withholding info, they figured the tax at marginal rates and did not take into account that part of it should have been at LTCG rates. She could tell me that, but could not change it. She told me to put that in the letter....

Then to make it even worse they nabbed this years state refund for the ~200 they showed as due.

I have all kinds of documentation: W2c, letter from employer, detail section of original W-2 that shows net disability pay, check stub from disability payment that shows gross tax withheld and net, and e-mails from employer.

Thought about printing it all out and sending to Taxpayer Advocate, but I think people here have said TA doesn't really do anything.

Employer sent me another e-mail that today she electronically submitted the W2c, so maybe give it another month or so?? At least the client is being nice about it and understands that it's not my fault.

[Nashville]

Never Used to be this bad

A conscious decision was made (and supported by Congress, if indeed not created by them) to trim the help staff and (anticipating the fallout) increase the staff in the collections area. They knew TAS was going to overwhelmed so the figured out how to take them out of the picture by limiting their access to poverty situations.

All of you know the results - happened about 3-4 years ago. 45-day letters (which never used to exist), taking forever for dust to settle on multiple directives mentioned in Kathy's post, liens and notices spewed out before things are settled in the audit division (never supposed to EVER happen), etc. etc. ad infinitum.

As a group (are there 300,000 preparers? more? less?) we are powerless because we are not organized to exert any action. And surely there are no lobbyists roaming the halls of congress representing us.

We can whine all we want and nothing will change. Can there be a plan of action?

[Burke]

I have all kinds of documentation: W2c, letter from employer, detail section of original W-2 that shows net disability pay, check stub from disability payment that shows gross tax withheld and net, and e-mails from employer.

I was thinking about this last night some more. And the one thing you apparently do not have are the copies of 941's filed in 2014, plus proof the taxes withheld were actually paid to the IRS either by check or EFT's. IF the withheld taxes were actually paid to the IRS in 2014 (or via amended 941-X in 2015), there has been plenty of time for that to have generated some correspondence about a discrepancy (if the W-2c had never been received by SSA.) Employer has not received anything? If SSA had never received the W2-C, why was a letter not generated by the IRS as to differences between what the two agencies have on record? Something does not make sense here.