What to Do If You Get Incorrect Tax Documents

Jessie Stake and Terri Adams were both surprised by the tax documents they received from the multi-level marketing company they worked with. The numbers on the 1099ks didn’t match their own records: Stake’s records showed she sold $5000 less than her tax paperwork showed, while Adams’ was off by over $20,000.

This can have huge tax consequences, as the IRS will wonder what happened to all that money. You don’t want to pay taxes on money you never received.

Both contacted their company headquarters with mixed results. The company representative told Stake that the tax forms were right, and she was wrong. Adams got a call back from accounting saying they would provide her with a line by line breakdown of how they arrived at the numbers. As of this writing, she hasn’t gotten the numbers yet.

What do you do when tax forms that are flat out wrong? It’s important that you get it correct and fast. Companies are required to have tax documents finished and available by January 31, but they don’t have to report the information to the IRS until February 28, so there’s time for corrections. Here’s what you do.

to keep reading, click here:  What to Do If You Get Incorrect Tax Documents

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6 thoughts on “What to Do If You Get Incorrect Tax Documents

  1. I was laid off from a small professional practice. When I went to apply for unemployment compensation benefits — to tide me over during my job search — I learned that the owner of the business had, for years, been reporting my earnings to the State under his Wife’s Social Security Number. This had to get corrected in order for me to be eligible for unemployment compensation. The Wife worked at the business — WITHOUT PAY — to help her Husband, so there was no innocent explanation for any income documents being issued bearing her Social Security Number. My being laid off was totally unforeseeable, the result of the owner having to move to a different climate due to health issues. I think they had initially thought that I would never need to file for unemployment and were doing this so that they could — at some point in time — “lay her off,” so she could file. Fortunately, once they got caught, they quickly filed correcting documents with the State.

      1. The first three years at my current job, all the Social Security payments went to a completely bogus SSN (it took that long for Social Security Administration to catch it), because the payroll system would add a zero to the beginning of the SNN.

        We don’t use that payroll system any more.

  2. This incorrect income records are more wide spread than people realize. Best way to avoid this is to look very closely to your paycheck stubs you receive. They should have number of hours, rate of pay, gross income, plus each and every deduction taken to get to net pay, plus a running total over the year so that basically your last check of the year is a preview of the W2 you will be receiving from your employer.
    You also should be checking that your information is correct—name address, social security number, emphasized employee number, company name and number.
    Based on your income level the taxes should be taken out according. Consult a chart, there’s many to be found on line, to insure correct taxes are taken out especially if you live in an area with state and local taxes.
    If you filled out W4 correctly and pay stubs are correct, this issue can be avoided. Never accept a cash paycheck envelope without a paper receipt. Even big companies have been known to have payroll problems. Don’t wait until tax season.

  3. I agree with checking your own math first. But if I got incorrect documents like this, and the issuer wasn’t willing to correct them, I would file a tax return using correct numbers, but with their forms attached AND a letter explaining why. I would also include all the original source documents — or if that’s impractical, such as in the case of the MLM business, I’d at least gather all the original documents in one place (you do still have them?) because you will get audited and you will win or lose on that stack of documents.

    – John David Galt, enrolled agent, Jackson Hewitt, Sacramento, CA.

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