Excess social security tax withheld by same employer but issued two separate w-2's for different divisions of the company.

[skimbleshanks]

Hello,

I work for a large retail store and in 2016 i changed stores mid-year.  The store I transferred to was a store my company acquired due to a merger.  Because of this I was issued two separate w-2's and overpaid social security taxes.  The two w-2's have the same EIN and both stores are under the same company name.  My employer states that although the store acquired during the merger has been re-branded (happened several years ago), they consider it a different division or subsidy within the company and that is why I was issued two w-2's.  The second w-2 does have on it both the current company name and also says "agent for (old name prior to merger)".  They state they cannot refund the excess.  

When I filed my 2016 taxes on TurboTax I researched this topic and understood that when TurboTax asked me about the excess SSI tax I should indicate that I worked for two different employers so it would return the excess on line 71 of the form.  I did that and TurboTax correctly filled out the form with the correct excess tax paid.  

However I have received notice from the IRS that they do not accept the claim that I worked for two different employers and are requesting I pay back the excess social security tax that was refunded.  So i'm now in the middle with both sides saying they will not refund the money.  What's the best way to proceed?  Pay the IRS bill and then file form 843 to get the money back?  All my original tax forms and w-2's submitted were correct so I don't have anything else I could submit to them to try and change their mind on the w-2's being from different companies.

Thanks

[BMcCalpin]

It sounds like you did everything correctly...but something this sort of thing happens.

My suggestion is this: Since you have to reply to the IRS letter, go ahead and reply with an attached completed form 843 and say the following:

1. Full names and EINs of the companies, as well as a brief history of how two companies ended up with the same EIN.

2. Include a statement that your employer refuses to refund the excess to you; therefore, having to repay the IRS while being unable to collect from the company would be a hardship on you. Quoting or even photocopying the reply would be helpful, along with the name and title of the person that told you this (oh, and his/her contact info). Give the IRS agent the chance to pick up the phone or dash off a form letter to the company telling the company to pay up.

3. Ask the IRS agent if he/she would accept this 843 in lieu of the repayment of the excess, since the point of the 843 is to get the excess refunded to you anyway.

The agent may say "OK", or may reply that you have to pay the excess pay and await the refund as the 843 is processed. But since you will have answered within the required time frame for the first letter, you shouldn't be penalized, and it may give the agent an opportunity to ask you for more information (or, of course, to just to tell you to mail it to wherever).

Nothing ventures, nothing gained.

[kberghof]

What wound up happening?  I just had the same thing happen to me!