Did the IRS say they were sending you a letter? You should (have) amended your 2016 tax return to include your 2016 W-2. Each year stands alone, and should never be combined. If you never filed a 2016 tax return, then you need to file one with 2016 W-2 included, and mail to the IRS. I suspect they held your 2017 refund when they saw that no 2016 tax return was ever filed. The IRS most likely will adjust your 2017 tax return themselves, and send you information on what your adjusted return/refund is, followed eventually by your refund. Again when you called them, did they tell you to amend, or that they would adjust your return? Another call might be worth the time. Good luck- It will get straightened out.
