W-2 Missing from Return

[ea_rva aka acctgtaxmatters]

My client did not provide a 2nd W2 that was issued. Ignored my emails concerning lower W2 wages that last year and "anything missing"...signed e-file authorizations, and 1 hour after I e-filed the return mentions the 2nd W2 (this was last Thu so Superseded comes into play somehow or not???)

The original return filed shows $5500 refund. 1040X shows reduced refund of $1500. 

Not sure what to do regarding the $4000 payment generated by the 1040X. Should I wait until the original refund is issued then file the 1040X? Could be the IRS corrects and send correct refund.

OR file the 1040X without the payment? OR is there another suggestion...

Thanks in advance for the guidance.

[dkh]

My vote:   file amended return now,  don't send payment

advise client IRS notices will be forthcoming and potential penalties which they will have to pay

[jeffmcpa2010]

I hope that is an EXPENSIVE 1040X...having to deal with if over the last weekend. Save the "find a new accountant letter/discussion, until your fees are all paid.

As to your question, I don't know the best way to handle it. I would probably wait until the refund comes in, but that's just me, and may not be the best or most correct way.

[Just-Lisa-Now-]

IRS may catch this one automatically when the withholdings don't match up with what they have on file (assuming the other employer submitted their forms timely to IRS)...personally, I'd sit on it until the original completes processing.

[rbynaker]

I'm not sure either.  I efiled a superseding return last week two days after the original return (same deal, lower refund on second filing).  I expect the client will get the full original refund and then have to repay the excess.  What I told my client "In a perfect world the IRS computer would know that there was a superseding return on file before releasing the refund from the original return. But unfortunately we live in this world instead. :("

[Just-Lisa-Now-]

Superseded returns are processed just like amended returns....you can check their status on the Wheres My Amended Return website.  They take 4+ months to process, just like an amended return....I did one that the site shows received on 2/16, not even to the second bar of processing yet.  Says to allow 16 weeks for processing to complete.

[BobKamman]

Since MEF, I'm not sure how long it takes returns to post to the Master File in Martinsburg, which then tells Treasury to issue refund checks.  But if the original return was filed just last week, I would file the superseding return now, hoping that it would freeze the account.  If it doesn't, I would tell the client not to cash the check, but to return it to IRS -- unless they don't want the hassle and are willing to pay interest on the amount paid back, when the refund check arrives.  

[rbynaker]

Thanks, Bob.  That was my thinking as well.  We'll see what happens in the real world.  I told the client to keep an eye out on their bank account and if the "wrong" amount shows up (direct deposit) they should call the bank and try to reject it.  In my case it's only ~$500 in tax so I don't care too much either way and this one was my f-up so I'll cover interest and penalties if there are any.

[ea_rva aka acctgtaxmatters]

Thanks all for the great feedback!!

[taxes96786]

You still have time to file a superseded return. Tell your client his choices are

1. return the refund if it comes in the amount of the original return

2. make payment for amount due though the superseded return or irs.gov

[rbynaker]

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@rbynaker wrote:

I'm not sure either.  I efiled a superseding return last week two days after the original return (same deal, lower refund on second filing).  I expect the client will get the full original refund and then have to repay the excess.  What I told my client "In a perfect world the IRS computer would know that there was a superseding return on file before releasing the refund from the original return. But unfortunately we live in this world instead. :("

---

I have resolution to this.  Refund came based on the superseding return amount (and NOT the original return).  So there must be some logic somewhere in the process.  Took about 7 weeks to process.  I'm (pleasantly) surprised.  [But waiting for the other shoe to drop . . .]

[taxes96786]

"I have resolution to this.  Refund came based on the superseding return amount (and NOT the original return).  So there must be some logic somewhere in the process.  Took about 7 weeks to process.  I'm (pleasantly) surprised.  [But waiting for the other shoe to drop . . .]"

There shouldn't be any shoe dropping. It appears that the system worked....IRS got the superceded return in time to process and issue the correct refund. 

[ea_rva aka acctgtaxmatters]

Thanks for the update Taxes96786. Good to know the superseding process worked and that it takes 7 weeks.

I opted to not file the superseding return and waited to see if IRS would adjust and add in the missing W2. They did not adjust and refunded the original incorrect amount. I was tracking the refund so once I saw it hit, I had an amended return ready and my clients were ready to pay back what was owed on the amended return.

Thanks to all!!