I'm in a hole

[jainen]

My friends, I'm in a hole on one of the other software forums, and I hope the greater wisdom here can dig me out. The question came up as to whether you should call an employer to verify a W-2 if you suspect it is fake. It was a popular thread with a dozen detectives weighing in. I was all alone in the minority opinion that it was not a good thing to do.

As usual, I don't mind being odd man out if you all care to join your colleagues against me. But isn't there anyone here who will champion my side? How should we handle those $12000 W-2's we're going to see next week?

[S T]

???

Jainen,
Are you saying that a taxpayer received a W-2 for wages that are not his and from an employer that he was not employed by?? But the W-2 is in the t/p name and social security #?
What are the circumstances?

Sandy

[jainen]

a reprehensible rumor

>>a taxpayer received a W-2 for wages that are not his and from an employer that he was not employed by??<<

Of course it is probably just a reprehensible rumor, but it is said that certain American citizens will forge a wage statement in the exact amount needed for maximum EIC. In this imaginary scenario, an innocent Electronic Return Originator could supposedly be tricked into signing off on the refund before the IRS document match program kicks in.

[skhyatt]

Are we as tax preparers supposed to be detectives? I'm not sure I would feel comfortable calling an employer. On the other hand, if I truly felt the document was fake, I'm not sure I would proceed with the return. Off the top of my head, isn't there something regarding preparer responsibilities on this?

[sea-tax]

I agree with you . If I truely felt the w-2 was a fake I would fire the client . I don't need the money that bad to get involved with a cheat. otherwise file the return and keep on a movin but definately no phone call. Not my place.

[S T]

Probably Not

I probably would not contact the employer, but then how are we suppose to know that the W-2 is a fake?

What is the proper protocol if we think we have a "fake W-2"?

Unfortunately the W-2 forms are not 100% standardized, we know what to look for from ADP, paychex, QB, and a few others, but I suppose those can be duplicated just like any other document.

Thank goodness, I do very few EIC returns and I have no walk in clients!

S

[mag]

The way I understand it if the W-2 is fake with an erronious EIN you cannot electronically file it.

[Brian EA]

Fake w2

I Will Send Them To H&r Jh Or Liberty

[Black Bart]

A curse

My friends, I'm in a hole on one of the other software forums, and I hope the greater wisdom here can dig me out. The question came up as to whether you should call an employer to verify a W-2 if you suspect it is fake. It was a popular thread with a dozen detectives weighing in. I was all alone in the minority opinion that it was not a good thing to do.

As usual, I don't mind being odd man out if you all care to join your colleagues against me. But isn't there anyone here who will champion my side? How should we handle those $12000 W-2's we're going to see next week?

upon you, j.c. May your stomach, God willing, roast in the desert. Isn't it enough that you've torn our tax theories to tatters with your thorny tongue? Must you now poke the collective conscience with this stick? Argggghhhhh!

And now: Yes, I agree with you. I would not call the employer.

Having said that, I'm with sea-tax -- I'd give the W-2 back to the client, while saying something like (assertive) "This doesn't look like an Acme Widget W-2 to me," or (non-assertive) "Sorry, but I'm leaving for the Bahamas in 15 minutes; you'll have to take this down the street to you-know-who" (my apologies to you again, White Oleander).

I don't know - I don't know. What to do? What should we do? We're sort of aiding and abetting by not doing anything. An IRS CID officer at a tax seminar last summer asked us to phone in all suspicious activity straight to her office, but I felt it was her job and not mine -- I didn't want to "get involved" as they/we so cravenly say (I guess that's the way the townsfolk felt in "High Noon"). Soooo, hmmm; what do I think about all this?

Read any good books lately?

[Brad Imsdahl]

"SECTION 7216. DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS


(a) GENERAL RULE

Any person who is engaged in the business of preparing, or providing services
in connection with the preparation of, returns of the tax imposed by chapter 1,
or any person who for compensation prepares any such return for any other
person, and who knowingly or recklessly--

(1) discloses any information furnished to him for, or in connection with,
the preparation of any such return, or

(2) uses any such information for any purpose other than to prepare, or
assist in preparing, any such return,


shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined
not more than $1,000, or imprisoned not more than 1 year, or both, together
with the costs of prosecution."


So lets say you call the employer listed on the W-2. You say you have a W-2 from one of his or her employees that you want to verify is correct. The employer asks you who this person is. You give the employee’s name, address, and Social Security number listed on the W-2. The employer says, “Nope, I don’t have any employee under that name, address, or Social Security Number.”

You just disclosed confidential information to this fake employer, since the fake employer did not have that information about your client prior to your call.

[Jiggers]

Disclosure

"SECTION 7216. DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS


(a) GENERAL RULE

Any person who is engaged in the business of preparing, or providing services
in connection with the preparation of, returns of the tax imposed by chapter 1,
or any person who for compensation prepares any such return for any other
person, and who knowingly or recklessly--

(1) discloses any information furnished to him for, or in connection with,
the preparation of any such return, or

(2) uses any such information for any purpose other than to prepare, or
assist in preparing, any such return,


shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined
not more than $1,000, or imprisoned not more than 1 year, or both, together
with the costs of prosecution."


So lets say you call the employer listed on the W-2. You say you have a W-2 from one of his or her employees that you want to verify is correct. The employer asks you who this person is. You give the employee’s name, address, and Social Security number listed on the W-2. The employer says, “Nope, I don’t have any employee under that name, address, or Social Security Number.”

You just disclosed confidential information to this fake employer, since the fake employer did not have that information about your client prior to your call.

I agree with Brad. That would be disclosure and you would be subject to a penalty if someone complained.

[BP.]

In your corner

From Pub 1345: If you observe questionable Forms W-2, report to IRS at 1-800-829-0433. I doubt I would call the employer. I also don't think that simply receiving a W-2 from "certain American citizens" (who are they???) in the range of income that would yield max EIC is enough to conclude the W-2 is questionable, especially when your doubt is based on a rumor you called reprehensible. That's the only info you provided to support the conclusion the W-2 may be fake. I think there'd have to be other indicators of forgery of the W-2. But your question is how to handle the $12,000 W-2's. Drawing on your own years of experience, if it doesn't seem legit, decline the job. But you know that already.

[Larmil]

My friends, I'm in a hole on one of the other software forums, and I hope the greater wisdom here can dig me out. The question came up as to whether you should call an employer to verify a W-2 if you suspect it is fake. It was a popular thread with a dozen detectives weighing in. I was all alone in the minority opinion that it was not a good thing to do.

As usual, I don't mind being odd man out if you all care to join your colleagues against me. But isn't there anyone here who will champion my side? How should we handle those $12000 W-2's we're going to see next week?

Just because they max the EIC does not mean that the are not legitimate. A friend of mine who does RALS and a lots of EIC returns has told me that many of his clients know exactly when to quit working in order to max the EIC every year.

[Eli]

Wasn't there a thread....

I Will Send Them To H&r Jh Or Liberty

recently where someone felt belittled because of these comments?? :-) Let's leave HRB & JH out of this discussion.

Jainen has brought an excellent discussion to life here :-)

Eli

[OldJack]

I probably would not call the employer as its not my job... however, I see nothing wrong with calling the employer giving only the name to see if the taxpayer was or had been an employee.

Its not my job or place to report anything to the IRS. The IRS certainly does not call me with any taxpayer information.

After verifying the person's ID (and or social security number) I would either prepare the tax return or send them to HRB or JH as they are probably better at handling fake W2's.