Amend or Not

[KHWEBERCPA]

Client's return has been e-filed and acknowledged for about three weeks.

This week, his employer notified employees that they had made an error on their W-2s, by not including life insurance in excess of $50,000 on Line 12, Code C. The employer decided to issue revised W-2s, which will be out this week. My client's income will increase by about $80.

Amending the Federal and state return will result in an additional $25 Federal and $8 state. Do you actually amend the return given this scenario, or wait for a letter from the IRS. I will tell the client what should be done, but as a practical matter, would you amend in this situation? Thanks for your advice.

Ken Weber

Vancouver, WA

[Lee B]

Myself I would wait for a letter unless the client wants to amend after you have advised them that they should amend.

[MsTabbyKats]

It depends how messy the amended return would be and how much the client already paid you. If it's not a big deal...it's good public relations to do it gratis. After all...it's not like she forgot to give you something.

[Jack from Ohio]

Put the corrected W-2 in their file. IRS will not issue a notice for $25 difference in tax. No amendment is needed.

[kcjenkins]

I agree with Tabby and with Jack. I'd do it IF THE CLIENT WANTS TO, but I'd let them know that IRS will ignore such a small change, because it costs them more to process the change than they collect. That is why, in an audit, if the change the auditor comes up with is less than $50 they write it up as a no-change audit.

[Abby Normal]

I agree with Jack. I've noticed when pulling IRS transcripts that often the IRS never processes corrected forms, and, even if they do, they won't come after you for $25.