Today TaxMama hears from Holly in Indiana with a huge problem. “Several years ago, I dated a man that painted homes for a living. Periodically I would help him, but never full time. I never was given a check or any form of money or income. We lived together and he paid all bills, food etc.. Not too long ago, I received a W2 from him stating that I owed taxes on $100,000! I never received a paycheck or any kind of money. Surely what he has done is illegal, please help!”
This is going to be quite a fight if he sent that W-2 to IRS. However,…you can win this battle.
First of all, a W-2 covers one year. If he’s saying you earned $100,000 during a single year, that’s going to be interesting to watch him prove it. There are penalties for issuing fraudulent W-2s and 1099s. But nothing major.
Second, which year is on that W-2? If he issued you a 2008 W-2, just how is he going to prove he even saw you that year, much less paid you?
So, what should you do with this? Well, I would put it on a tax return for the designated year as income. Take it back out on Line 21 Other Income. I would include a note that this is a fraudulent W-2. Explain what you explained to me. Ask IRS to please obtain proof of the payroll payments he claimed that he made to you.
Beware, if he wrote checks to you or gave you money for shopping and such, he might be able to construe that as income to you.
If he issued the W-2 for a year you no longer lived with him…it will be much easier to prove you never got money from him. Bear in mind, if the W-2 is showing a very old year, there is no statute of limitations for unreported income. You will have to file a tax return for the old year, or an amended return.
You may need to get professional help to keep IRS from trying to collect. Especially since this may have been initiated because he is in the middle of an audit and decided to share the pain with you. http://snurl.com/preparer . Good luck!
And remember, you can find answers to all kinds of questions about vindictive W2s and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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