As long as the employee has a W-2 form, check stubs, or some other reliable documentation showing the withholding, they will get full credit on their tax return. This is true regardless of whether the government ever collects a nickel from the responsible party. A problem can arise when the employer goes belly up, loses or detroys records, and doesn't issue W-02 forms. If the employee doesn't have some sort of secondary documentation then they can find themselves with a problem as well.
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"The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
Thank you JohnH
Thank you, Mr. JohnH, for your highly professional answer to my question. It may have been an obvious question, but nonetheless I am OtisMozzetti(not my real name, but rather the name of my neighbor's black Labrador retriever) EA in California. Henceforth, I expect to always think of you as a Charlotte-an rather than a Charlatan.Comment
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Glad I could help out. The only reason I know this is because I have found it necessary to help a couple of people reconstruct W-2's over the years when the found themselves in this situation. (Also tried to help an employer in this situation one time, but that turned into a nightmare I don't want to talk too much about because of the bad memories).
Your comment about the question being obvious is interesting. I've found it's best to ask anytime there's a question in my mind. I've posted what I thought were obvious questions (or answers) on this forum several times and then learned from the resplies that things aren't always as obvious as they first appear. The peer review afforded by this board has helped me personally to avoid several potential pitfalls.
As for the Charlottean vs Charlatan issue, I have one or two clients who might take issue with you on which category I fall into.Last edited by JohnH; 08-28-2008, 08:08 AM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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