Can I Sue My Employer for Messing Up My Taxes?

Navigating Incorrect or Missing W-2 Forms

Understanding Your W-2 Form

A W-2 form is a crucial document that summarizes your annual earnings and taxes withheld for federal, state, and local governments. It is essential for completing your tax return accurately.

Employer’s Responsibility

Employers are legally obligated to provide all employees with a completed W-2 form by January 31st. This form should accurately reflect your wages, tips, and other compensation, as well as the amount of taxes withheld.

Consequences of Incorrect or Missing W-2 Forms

Receiving an incorrect or missing W-2 can be frustrating and may lead to errors on your tax return. However, it’s important to remember that not receiving a W-2 does not excuse you from filing your taxes or extend the filing deadline.

Steps to Take if Your W-2 is Incorrect or Missing

  1. Contact Your Employer: Reach out to your employer’s payroll or human resources department to report the error or request a copy of your W-2.
  2. Call the IRS: If you do not receive a corrected W-2 from your employer by the end of February, contact the IRS at 800-829-1040. They will send a letter to your employer requesting the missing W-2.
  3. File Form 4852: If you still do not receive the necessary W-2, you can file a substitute W-2 using IRS Form 4852. This form should include your estimated wages, tips, and taxes withheld.

Legal Action Against Employers

While it is possible to take legal action against an employer for failing to provide a W-2 or providing an incorrect W-2, it is not typically done through individual lawsuits. Instead, you can:

  • File a Form W-2 Complaint: Contact the IRS to initiate a Form W-2 complaint if your employer does not correct or provide your W-2 by the end of February.
  • Contact Labor or Tax Authorities: You may also consider reaching out to labor or tax authorities to report your employer’s actions.

Additional Resources

Dealing with incorrect or missing W-2 forms can be stressful, but it is crucial to take the necessary steps to ensure accurate tax filing. By following the outlined procedures, you can protect your rights and resolve any issues related to your W-2.

Top 5 Reasons To Sue Your Employer

What happens if you file a tax complaint with the IRS?

“Once they report this to the IRS, the agency will initiate a formalized complaint process and attempt outreach to the employer,” said Stephen Dombroski, senior manager, payroll tax compliance at Paychex. In this case, the IRS will send you Form 4852 so that you can estimate the data that would otherwise be on your W-2 and file your taxes.

Can I sue my employer if I owe taxes?

There is no financial benefit to you to sue your employer. The amount of money, if your employer did pay the taxes, the legal fees to force them to do so would dwarf the recovery. You could take them to small claims court but the judge will likely not look at it favorably since the same amount of taxes would likely be due. All the best!

What happens if an employer fails to meet its employment tax obligations?

Where an employer has failed to meet its employment tax obligations, the IRS can pursue the civil sanctions (the 100% trust fund penalty) under Sec. 6672 or criminal sanctions of imprisonment and fines under Sec. 7201 or 7202. Both the civil and criminal statutes include the element of willfulness on the part of the taxpayer.

What happens if an employer does not pay FICA tax?

If the employer does not recover the amount from the employee, the payment of the employee share of FICA tax by the employer is current wage compensation, subject to FICA and income tax withholding, and reflected on the employee’s year-end Form W-2.

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