@Mike9241
The IRS has nothing to do with this. The W-2 is correct. It shows the withholding that was actually collected during 2022. It can't be changed retroactively. The fact that the employer should have stopped the Illinois withholding and switched to California withholding doesn't change the fact that the W-2 accurately shows what really did happen.
The problem here is that Illinois (seemingly, remember, we can't see the taxpayer's letters or hear the phone calls) wants the employer to certify that the employee moved. This seems to me to be the wrong demand. The employer has no say over where the employee lives, as long as the employee completes their duties. The employee could have lived in Indiana or Michigan while working in Illinois, and the employee could be living in Arizona or Nevada right now and just commuting a really long way to their current job in California. The state of Illinois should be asking the employee to prove where they live, and that they changed their permanent residency (their domicile), not asking the employer to ratify it.
@coolbean
Some additional dialog needs to happen between the taxpayer and the examiners in Illinois. It may be time to get a professional involved, although whether an attorney or an accountant would be better, I can't say.
