Stopped Paycheck

[JonesTaxPro]

I have a TP who was working in FL about 3 years ago for a dr office. TP was fired/quit (not sure), received last paycheck and went to cash/deposit it and employer stopped payment on the check. TP has check yet and w-2 included these wages. Any ideas if TP can go after dr office for money through legal methods? Just wondering on statue of limitations on this. Thanks.

Sara

[chuck]

Might be able to amend the return showing proof that the check was stopped. Did he get a pay stub where the yearly toals on w-2 supposedly matched the check stub of the check that was stopped payment on?

[kcjenkins]

I would not ASSUME that this is the whole story. For one thing, if it were the whole story, he'd have almost certainly done something about it before this. He may have owed the employer some money that the owner offset against that last check. Which in some states is not legal, but in some it may be. And even if it were not legal to do the offset, the SOL started running when he did that, and is probably run out now.

Since you have not put your state in your profile [and I wish you all would at least put the state in there, please] I don't know what state we're talking about, but amending the return would NOT be the way to go. At best he might have a claim in small claims court against the guy, but if he wanted to explain the situation to a Judge I bet he'd have done that years ago.

Almost certainly, there is more to the story than you know, so giving him any more advice than to talk to an attorney would be a mistake, IMHO. It's clearly not a tax issue, because proving, at this late date, that the W-2 was in error is almost impossible. Especially given that the SOL on amending it is about to run out, too.

[JonesTaxPro]

KC - I am from WI (which is in my profile), there were some medical issues with the TP and they were unable to follow up on the stopped checked. But at least I know that the SOL will be up soon. Thank you for that information. I will talk to TP to get a little more info and check tax return to verify info.

Sara

[JohnH]

How about relevance? Did he tell you how much the paycheck was for and what his tax rate is? For example, if there's a $1,000 overstatement of earnings with no withholding credit, and his marginal tax rate is 15%, then he's going to save $150 in tax. Subtract your $200 charge for reviewing all the paperwork, writing an explanation, and amending the return, and he's losing money on the deal. If his marginal tax rate is 25%, then at most he's $50 ahead, assuming it flies. As KC said, if it wasn't important enough to pursue the actual cash 3 years ago then the tiny tax consequnces aren't worth the hassle (for you or for him).

Sounds like he just wants to get a little revenge by trying to make trouble for the employer.

[JonesTaxPro]

Talked to TP last night. Never received W-2 and never filed return because of medical issue. I told her to contact IRS to get a copy of W-2 and we could file return. Regarding revenge - possible, but she is hurting for $ and if entitled to check, then need to check if worth pursueing:) Thanks for all the input. :)

[jainen]

>>w-2 included these wages<<

How do you know that, since you NOW say he never even got a W-2? I'm with kc on this--there's more to the story.

[JonesTaxPro]

Yes, I agree that there is more to the story. Like I said I talked to her last night and clarified some of the story. I am letting TP do most of the leg work on this as this is her mess and I am trying to stay out of it. I just wanted some opinions on how to handle this and if I should tell TP to keep going or to just chalk it up to experience and forget about it. Thanks for all the input.