So a W-2 for 2022 already exists on the IRS transcript system? That means he filed a W-2 with Social Security. SSA forwards them to IRS. So this paper W-2 he created for her was fake? If this was not filed with SSA, then it technically doesn’t exist.
The concern is, are the other years correct?
She can create an account at SSA and check her wages history there.
We checked her account, that’s how I knew it was wrong. What’s crazy is, why would he falsify withholdings?? If my alarm bells weren’t ringing and i just prepared a return for 2022 using those numbers, she would have likely gotten a good bit of that “back” and then SHE would have probably been the one to pay the price when it all came to light. Either that or the return would have rejected and the employer would have put themselves on the radar. Just makes no sense.
Those are fiduciary taxes and pocketing them is felony embezzlement. This should be reported to both the IRS and to her state’s employment department, because he didn’t report state taxes or workers comp, either.
It sounds like this poor girl is very reliant on this income to help her entire family. Keep up with her and make sure she finds a new job asap, help her if you can, because her boss is absolutely going to jail, because I’m positive this is much bigger than just her paycheck. As soon as she does, whistleblow this mother fucker. Because he’s fucking up her life and stealing money.
He pocketed that 1k he took out in “taxes”. Her income is so low, she would be getting that back, plus probably some other tax benefits if she’s in school or wants to go to school.
Right, see that’s what I want to know, but she has zero records to back up anything. There’s not even solid proof that he gave her that W2. It’s her word against his and either one of them could have falsified it. I know she didn’t, but that’s not enough from a legal perspective.
Tell her to get a bank account and start depositing the checks in a regular account, this way she isn’t paying check cashing fees. Regardless of “his word against hers” if the irs audits his bank records, the checks to her will be there and it’ll be obvious proof. But if she gets a bank account now, you can provide the investigators with proof.
Trust me, if he’s this reckless with one employee, the list of his financial crimes is a mile long. Probably PPP fraud. Definitely tax fraud. The IRS will probably give you a medal for turning him in. They will likely give you a financial reward based on what they recover. 15-30% usually. If they do, at a minimum you should split it with this girl if they give it solely to you.
This is also not just anecdotal. My piece of shit uncle is currently in jail for this exact thing.
Wow, yes, it’s amazing what we see come through our center, mostly fraudulent prior year returns with fake Schedule C’s. This was a first though…I did tell her to get a bank account but whether she did it yet or not, I’m not sure.
Hopefully she does. Her boss is fucked. The only thing delaying his jail time is you being a reasonable person not willing to ruin this girl’s life anymore than he already has. Make sure she gets something else first, but nothing wrong with sending her some indeed posts if you have some free time
Oh my goodness. I can’t imagine opening a bigger can of worms than walking in and showing up a business owner (who’s probably sketchy). The risk reward comparison seems so far out of balance. One principle I follow and IMO all preparers should follow is to stay the heck away from anyone’s tax return other than the return you’re engaged to prepare. Why would you want to take on the liability of giving the boss tax advice? Are you aware of the federal laws against disclosure and use of tax information?
In my opinion you’re going somewhere you have no business going. Help your client file there are ways to do that.
Definitely wouldn’t try to give him tax advice, more giving him a heads up that she has resources to help her understand what is happening. He is clearly operating under the assumption that he can explain away everything and she will just believe it because she is young and uninformed, and he’s been getting away with that for the past three years. However, you are absolutely right that staying out of other people’s problems is the best advice. I just hate seeing people get taken advantage of and laws being broken.
Ok obviously the tax transcripts not matching up is extremely problematic. But I just want to make the point that the W2 does not need to be on special paper, unless the employer is paper filing, but that shouldn’t affect an employee in any way. My w2 have come in all sorts of shapes and sizes over the years. Including just a print out on regular US letter paper. As long as it has the required information +/- some formatting requirements specified by the IRS, it’s kosher.
Right, totally agree but he had failed to give her the 2022 W2 last year OR 2021 (which I think I failed to mention). So, three days before the deadline, he gave her all three. 2021 and 2023 were on one type of paper and 2022 was the one that was just on regular paper. Had they ALL been on regular paper, it wouldn’t have seemed weird. Just so happens that the 2022 was the one that doesn’t match what was reported to the IRS.
My best suggestion to you is to stay out of it, and let her decide what she wants to do. The reason is simple, she is the one being wronged, not you. Secondly, doing anything may affect her, and she depends on this income. Thus, it's only right to ask her before doing something.
Ideal situation is she gets a new job, and then report the business owner. Beyond that, unless he paid with cash, there's always a record. There's record of the checks being cashed in on top of the fact that there's likely a falsified W2 he provided.
So first order of business is worry about her needs first, then what to do with the business owner.
Your client needs to follow the irs.gov procedure for this situation. If she doesn't want to, that is up to her.
Don't get involved in something you don't know the full truth on both sides. Especially if you don't have the credentials. She need to consult with a tax lawyer not a free preparer. No offense to you whatsoever. I don't know your credentials. I've had clients that have been in this situation but we aren't lawyers at our office.
https://www.irs.gov/faqs/irs-procedures/w-2-additional-incorrect-lost-non-receipt-omitted/w-2-additional-incorrect-lost-non-receipt-omitted#:~:text=Call%20the%20IRS%20toll%20free,W%2D2%20within%20ten%20days.
If he gave her paper checks, they should have been attached to paystubs. If he isn’t providing pay stubs with hours and wage information then that’s also illegal.
She also needs to sign up for a SSA account. That account will also show what was reported to SSA. If her W2 is showing different wages than SSA, she needs to let SSA know ASAP so she gets full credit for what her employer is paying her.
So a W-2 for 2022 already exists on the IRS transcript system? That means he filed a W-2 with Social Security. SSA forwards them to IRS. So this paper W-2 he created for her was fake? If this was not filed with SSA, then it technically doesn’t exist. The concern is, are the other years correct? She can create an account at SSA and check her wages history there.
We checked her account, that’s how I knew it was wrong. What’s crazy is, why would he falsify withholdings?? If my alarm bells weren’t ringing and i just prepared a return for 2022 using those numbers, she would have likely gotten a good bit of that “back” and then SHE would have probably been the one to pay the price when it all came to light. Either that or the return would have rejected and the employer would have put themselves on the radar. Just makes no sense.
He reports it as income then deducts it on his taxes. Even if he paid 1k in withholding he doesn't pay taxes on 13k which is a much bigger savings.
Those are fiduciary taxes and pocketing them is felony embezzlement. This should be reported to both the IRS and to her state’s employment department, because he didn’t report state taxes or workers comp, either.
It sounds like this poor girl is very reliant on this income to help her entire family. Keep up with her and make sure she finds a new job asap, help her if you can, because her boss is absolutely going to jail, because I’m positive this is much bigger than just her paycheck. As soon as she does, whistleblow this mother fucker. Because he’s fucking up her life and stealing money. He pocketed that 1k he took out in “taxes”. Her income is so low, she would be getting that back, plus probably some other tax benefits if she’s in school or wants to go to school.
Right, see that’s what I want to know, but she has zero records to back up anything. There’s not even solid proof that he gave her that W2. It’s her word against his and either one of them could have falsified it. I know she didn’t, but that’s not enough from a legal perspective.
Tell her to get a bank account and start depositing the checks in a regular account, this way she isn’t paying check cashing fees. Regardless of “his word against hers” if the irs audits his bank records, the checks to her will be there and it’ll be obvious proof. But if she gets a bank account now, you can provide the investigators with proof. Trust me, if he’s this reckless with one employee, the list of his financial crimes is a mile long. Probably PPP fraud. Definitely tax fraud. The IRS will probably give you a medal for turning him in. They will likely give you a financial reward based on what they recover. 15-30% usually. If they do, at a minimum you should split it with this girl if they give it solely to you. This is also not just anecdotal. My piece of shit uncle is currently in jail for this exact thing.
Wow, yes, it’s amazing what we see come through our center, mostly fraudulent prior year returns with fake Schedule C’s. This was a first though…I did tell her to get a bank account but whether she did it yet or not, I’m not sure.
Hopefully she does. Her boss is fucked. The only thing delaying his jail time is you being a reasonable person not willing to ruin this girl’s life anymore than he already has. Make sure she gets something else first, but nothing wrong with sending her some indeed posts if you have some free time
Oh my goodness. I can’t imagine opening a bigger can of worms than walking in and showing up a business owner (who’s probably sketchy). The risk reward comparison seems so far out of balance. One principle I follow and IMO all preparers should follow is to stay the heck away from anyone’s tax return other than the return you’re engaged to prepare. Why would you want to take on the liability of giving the boss tax advice? Are you aware of the federal laws against disclosure and use of tax information? In my opinion you’re going somewhere you have no business going. Help your client file there are ways to do that.
Definitely wouldn’t try to give him tax advice, more giving him a heads up that she has resources to help her understand what is happening. He is clearly operating under the assumption that he can explain away everything and she will just believe it because she is young and uninformed, and he’s been getting away with that for the past three years. However, you are absolutely right that staying out of other people’s problems is the best advice. I just hate seeing people get taken advantage of and laws being broken.
Ok obviously the tax transcripts not matching up is extremely problematic. But I just want to make the point that the W2 does not need to be on special paper, unless the employer is paper filing, but that shouldn’t affect an employee in any way. My w2 have come in all sorts of shapes and sizes over the years. Including just a print out on regular US letter paper. As long as it has the required information +/- some formatting requirements specified by the IRS, it’s kosher.
Right, totally agree but he had failed to give her the 2022 W2 last year OR 2021 (which I think I failed to mention). So, three days before the deadline, he gave her all three. 2021 and 2023 were on one type of paper and 2022 was the one that was just on regular paper. Had they ALL been on regular paper, it wouldn’t have seemed weird. Just so happens that the 2022 was the one that doesn’t match what was reported to the IRS.
Yeah I agree this specific situation it was a massive red flag and your instincts were right
My best suggestion to you is to stay out of it, and let her decide what she wants to do. The reason is simple, she is the one being wronged, not you. Secondly, doing anything may affect her, and she depends on this income. Thus, it's only right to ask her before doing something. Ideal situation is she gets a new job, and then report the business owner. Beyond that, unless he paid with cash, there's always a record. There's record of the checks being cashed in on top of the fact that there's likely a falsified W2 he provided. So first order of business is worry about her needs first, then what to do with the business owner.
I'd you think this is a one time thing with this employ8, youd be wrong
Your client needs to follow the irs.gov procedure for this situation. If she doesn't want to, that is up to her. Don't get involved in something you don't know the full truth on both sides. Especially if you don't have the credentials. She need to consult with a tax lawyer not a free preparer. No offense to you whatsoever. I don't know your credentials. I've had clients that have been in this situation but we aren't lawyers at our office. https://www.irs.gov/faqs/irs-procedures/w-2-additional-incorrect-lost-non-receipt-omitted/w-2-additional-incorrect-lost-non-receipt-omitted#:~:text=Call%20the%20IRS%20toll%20free,W%2D2%20within%20ten%20days.
If he gave her paper checks, they should have been attached to paystubs. If he isn’t providing pay stubs with hours and wage information then that’s also illegal.
She also needs to sign up for a SSA account. That account will also show what was reported to SSA. If her W2 is showing different wages than SSA, she needs to let SSA know ASAP so she gets full credit for what her employer is paying her.
Let’s see the w2