Unless the car was used ONLY for business, the car is NOT a completely tax free benefit. Assuming that is the case, that value SHOULD have been added to their 2016 W-2. In other words, 2016 SHOULD have been in the higher tax bracket.
It seems it was not added to the 2016 W-2, so the employer took a shortcut and put it on the 2017 W-2 instead.
If that is the case, I would not argue it at all. If the OP's income is similar in 2016 and 2017, arguing to correct things will result in extra work (amending 2016), similar amount of tax, PLUS interest owed on the 2016 tax.
