Seems like there is a form whereby you can protest the accuracy of a W-2. I have a customer where he is being taxed on appx $10,000 more than he really made.
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Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
As was noted in the link, the first step is to ask the employer about it, and ask the employer to correct the W-2 if it is wrong.
However, be aware that is is possible the W-2 is correct, perhaps due to taxable fringe benefits. For example, if the taxpayer was able to use a company owned vehicle for personal purposes, that would be a taxable fringe benefit that would be added to the W-2.Comment
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I tend to agree with TaxGuyBill.
Your (your client's) first action is to contact the employer to see where the "error" is. There are many things that can bump up taxable wages. Is there anything unusual in Box 12 and/or Box 14 of the W2?
IF there is, indeed, an error then you ask the employer to provide a corrected W2 and then you file that document, with the appropriate notations in your software.
Only as a last resort do you start butting heads with the IRS over the accuracy of a W2.Comment
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For those of you who may be curious, the so-called "employer" is NIssan. Taxpayer owns three cars that he is paying payments at a discounted rate. Information from Nissan claims the fair market rental is $14,000 for these cars and issues a W-2 for that amount. However, taxpayer is paying $10,000 per year, meaning his benefit is only $4000. Nissan has been informed by many such car owners of the error and refuses to do anything about it. These are all used vehicles, and the fair rental value is only $14,,000 not $24,000.
I have rounded numbers, of course. I believe this is the correct position, but if there is any more discussion from those of you who have similar situations, please post.Comment
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Do you know enough about the Nissan Vehicle Purchase Program (VPP) for employeess and other affliates to judge whether the W-2 is accurate or not? Are the payments being made in arrears? Do the payments include taxes and other fees?"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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No one if forcing him to use the discounted lease, are they? His choice if he want to use it and pay any associated taxes or not. I'm sure Nissan has a team of lawyers and accountants that oversee the program and contracts. Highly doubtful a tax preparer from TN knows more about it than they do, but.......Comment
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MY bet goes to it's a correct W2, along the lines of the points raised upthread by Rapid Robert.Comment
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Ah yes, the iggo-nert TN tax preparer is called out (again), with jug of moonshine by his side. This time ostensibly pitted against a team of lawyers from a Fortune 500 company.
I would be interested to see if this has ever gone to court - maybe NYEA keeps up with this sort of stuff. This would most likely not be a tax court case with the IRS involved. It could be as Nissan being the defendant.
I don't think it is a matter of tax law, or any law for that matter. It is a matter of simple math. If the FMV lease of a 2018 Rogue is $360 per month ($4320 annually), and the discounted rate is $320 per month, the benefit is $40 per month, or $480 per year. If this is the only vehicle involved, the W-2 should not be for $4320 but instead of $480. In my situation, the client is paying for 3 autos, with the discounted rate being offered as a former employee.
Further, if you stop and think about it, given a sufficient tax bracket, if every discounted situation were taxed at the gross FMV rate, no one would accept the offer, as the tax cost would outweigh the benefit. That may have something to do with Kathy's point that the taxpayers are not being forced to accept these deals. If I rented three late model vehicles and had to pay tax on the gross value, I would turn it down even if I were in the 12% bracket.
I don't know whether my client's W-2 is an isolated incident, or whether Nissan's error is more widespread. I will also admit to not being familiar with other such agreements, such as possibly Ford, GM, or Toyota, nor have a read the legal jargon in such agreement. It is a matter of simple math.
Sorry guys, I'm not the most popular kid on the block - I've been dumped on before, here and elsewhere. I'm simply not going to back off a situation as blatantly unfair as this.Comment
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Oh, don't get your panties in a wad.Originally posted by Beersheba View Post
If you want to know how Nissan came up with the amount, get a copy of the contract from your client. More likely than not, the amounts used are shown in the contract.
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Yes, I have run into this issue last year, and again the conventional wisdom from the most learned people seemed to think that the well-resourced Nissan with their Army of lawyers and CPAs were surely with more advanced than myself. I used Form 4952 last year, and no ugly letters from the IRS - of course they are way behind.
If the customer receives repercussions from this, I believe it is a winner based upon math alone. The "gross" values are supplied by Nissan itself, and tie to the taxable amount on the W-2 - according to the clients' daughter. No reduction is afforded based on payments, and the 2012 document supplied by Judy on the other forum supports our treatment as well.Comment
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If you filed the 4852 last year, why was your first question asking what the form is?
You filed a 1040 using the numbers you came up with on the 4852?
You did the above without even getting a copy of the lease agreements?
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Kathy if you're going to continue to find things wrong with my posts, you will be presented with an abundance of material.Comment
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I am gobsmacked that a tax professional would take it upon themselves to use a different amount on a tax return than what shows on a W2 without doing their due diligence. I hope you explained to client any potential tax penalties of this action.
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