I have a good question about a LH post

[Gregg]

The post in question is

http://www.losthorizons.com/phpBB/viewt ... c&start=45

Posted: Thu Feb 19, 2009 12:43 pm Post subject: Got CP15 anyway

--------------------------------------------------------------------------------

I replied to my 3176SC letter with the usual "You're off your rocker..." response. Since that time, I received a W2-c from my boss which I promptly also sent them with a "See, I'm not mad..." letter.

Well, I got the CP15 anyway.

I guess I should have sent a 1040X including it, otherwise it may not go on the record. I'm just trying to figure out how I go about demonstrating that the 4852 matches the W2-c and therefore can't be frivolous.

Any ideas?

It looks to me like this guy got the boss to drink the kool aid. My question is this, who is gonna get in trouble here? The boss, who presumably has to go back and do the same for all his employees, and in the process re-do his taxes going back several years (even a small company would have to pay someone a nice fee to do this, to be honest he needs to go back 3 years at least) How about he employee, who can, as the poster does, say, "I'm just reporting what my employer reported to me" I mean, what happens in the odd case where the Loserhead talks the company he works for to go the CTC way? Not that I caer about the guy, but the otehre employees are or can be affected by this....

[LPC]

It is an absolute waste of time to try to figure out what is going to happen to someone based on a Lost Horizons (or other tax denier website posting) because they are either ignorant, or lying, or delusional, or otherwise batshit crazy.

Regardless, trying to apply their rantings to reality is a complete waste of time.

[Kimokeo]

If the w-2c changes the amount downward, then you are talking about a refund.
However, this affects more.

The employer probably wrote of the wages paid as an expense. Another amended document needs to be filed which probably will net a debt owed to the IRS. If a legitimate mistake, the penalties probably could be challenged.

Imagine if the employer now decides to change every employee they have to 'zero wages'.
That means the write-off of all those wages is now zero. Imagine the tax to the business or to the individual filing the Sch C.

Every time I hear about the argument of the W-2 being false and the employer is wrong - if the employer is wrong, there are tax consequences for the employer because of the write-off claimed.

[Randall]

Just wait 'til someone quits or gets laid off then watch the fun begin at the unemployment office.

[LPC]

The employer probably wrote of the wages paid as an expense. Another amended document needs to be filed which probably will net a debt owed to the IRS.

Not necessarily. For example, changing the status of a worker from an "employee" to an "independent contractor" would reduce the deduction for "wages" but increase another deduction for contractor fees paid.

Payments by a corporation to an individual are usually either (a) deductible to the corporation and income to the individual, or (b) not deductible by the corporation and not income to the individual. But that is the result of a number of different provisions of the IRC working together and not a rule of law, and there are circumstances under which payments can be deductible but not income, or not deductible and yet income.

The real problem for the employer is that he prepared a false W-2C to help an employee evade tax, not that he shouldn't have claimed a deduction or is being inconsistent in his reporting.

[Gregg]

The employer probably wrote of the wages paid as an expense. Another amended document needs to be filed which probably will net a debt owed to the IRS.

Not necessarily. For example, changing the status of a worker from an "employee" to an "independent contractor" would reduce the deduction for "wages" but increase another deduction for contractor fees paid.

Payments by a corporation to an individual are usually either (a) deductible to the corporation and income to the individual, or (b) not deductible by the corporation and not income to the individual. But that is the result of a number of different provisions of the IRC working together and not a rule of law, and there are circumstances under which payments can be deductible but not income, or not deductible and yet income.

The real problem for the employer is that he prepared a false W-2C to help an employee evade tax, not that he shouldn't have claimed a deduction or is being inconsistent in his reporting.

Wouldn't changing them all save him on FICA employer tax, and by so doing maybe be tax evasion by the employer?