Wrong Income on W-2

[Bees Knees]

Interesting question on another board about how to handle it when someone gives you a wrong W-2. The employees never got paid all of their wages because the employer wound up in jail. The accountant issued W-2s showing total income of about $3,000 more than actual wages paid. The accountant refuses to re-do the W-2s.

The correct answer in this situation is to file Form 4852. The instructions say:

“Purpose of Form - Form 4852 is completed by taxpayers or their
representatives when their employer gives them an incorrect Form
W-2 or an incorrect Form 1099-R. This form is also used when the
employer or payer does not give the taxpayer a Form W-2 or
Form 1099-R. This form serves as a substitute for Form W-2,
W-2c, or 1099-R. Use this form to file your income tax return.”

[henrif]

Pay Stubs AND W2 Have Errors

I have a case where both the Pay Stubs and the W2s have errors.

The company was taken over by another company and in the mean time the preparer of the company's payroll passed away. The owner has no idea whats going on and when approached by the employee (I believe there are only two employees), she took the computer generated W2 and crossed off the EIN, Employer Name and used white out to enter handprinted income information.

We notified the employee that the W2 will present problems and should get the employer to issue a corrected W2. She did get a 'new' nonstandard W2 with the exact same information as handprinted on the original W2, however, when comparing the amounts to the employee's paystubs, the totals don't jive and there is a noticeable discrepancy from only one paycheck to another where a phantom amount appears in the YTD totals.

The employer refuses to talk to the employee or doesn't understand what is being asked.

Two things become an issue at this point...the employee did not receive a corrected W2 with the EIN from the computer generated W2...the amounts are not the same from the Re-issued Nonstandard W2 and her paystubs--wages were understated and withholdings as well--no FWT was withheld correctly...A return statement with the obvious differences must be attached to the return, however, with the paystubs containing that obvious error, among others--such as pay period dates, it is somewhat of a dilemma...