IRS says W-2 “not received,” claims $0 federal withholding, now demanding double — employer already filed W-2 via Paycor. What should I do before hiring an attorney?

[user17704478253]

Hi everyone — I’m looking for guidance on next steps with an IRS issue that seems to be caused by missing/incorrect wage & withholding data on the IRS side.

Situation:

• The IRS is claiming they never received my W-2 for a prior tax year and is now demanding about 2x what we already paid for that year.

• The W-2 was filed by the employer through Paycor (employer says it was submitted as required).

• We also mailed our return with a complete Form 1040 and the W-2 attached.

• The IRS first claimed they never received the original filing, but we have USPS tracking proof showing delivery.

• We then mailed a second identical copy of the same return (again with tracking), also delivered.

• The IRS appears to have entered the return incorrectly and is treating it as if we had $0 federal withholding, even though the 1040 clearly reflects roughly $30,000 already paid/withheld.

• They have now seized our most recent year’s refund to offset the balance they say we owe.

• Based on our records, the IRS actually owes us roughly $10,000 across the two years once the W-2/withholding is properly credited.

Problem:

• The IRS is refusing to accept another copy of the W-2 from us and says it must come directly from the employer.

• The employer says it was already sent via Paycor.

• I’ve gone to the local IRS office twice and spent 10+ hours on the phone, with no resolution.

• The IRS tax transcript doesn't show a W2. I'd does show they made a revision, because at one point it showed we were owed a refund.

Questions:

1. What is the most effective way to get the IRS to properly post the W-2 and federal withholding (or correct their data entry error)?

2. Is there a recommended process to have the employer/Paycor re-file or re-transmit the W-2 if the IRS insists it’s missing?

3. Given they already offset our refund, should I contact the Taxpayer Advocate Service (TAS), and what qualifies as “economic hardship” or urgency?

4. At what point does it make sense to involve a tax attorney or enrolled agent, and is there anything I should do first that typically resolves this faster?

I can provide redacted copies of notices and dates if needed. Thank you for any guidance.

[user17704478253]

One IRS agent informed me that what she sees entered is: line 25e is 0, and line 29: 29,300. This is what I sent them. 

[MaryK4]

Can you clarify why the IRS says they did not receive a W2?  If they do not have record of the W2 withholding, how do they have record that there was taxable income?  It seems the issue starts with the employer not filing and/or submitting the tax.  This may be the best place to start- request that the employer provide proof that the W2 was filed.  If you have not already done so, download any tax forms, paycheck records etc from Paycor.  You should also try the Social Security Administration- they would be able to see if you have the Social Security/Medicare contributions for the year were made.   

I would contact the Taxpayer Advocate as well- it is best to have as many options available when dealing with a situation such as this.  You can also contact your local U.S. Representative or Senator’s office, usually through their website’s "Help with a Federal Agency" section. 

Please update on this post if you have other questions.

[user17704478253]

Thank you!

The multiple agents I have talked to, cannot confirm how they are assessing the amount owed without having a W2. Which is where I am completely confused. 

Employer claims they filed the taxes, we have reached back to them requesting some form of evidence. ( No longer work there, so priority seems to be quite low).

Will reach out to all suggested. 

Thank you for the reply and help!