The failure of an employer to properly deduct and remit payroll taxes
is one of the most serious errors that any taxpayer can make. In addition to the taxes due, the employer and any person who was personally responsible for remitting the taxes, will be assessed a 100% penalty to the IRS for the failure. And, there is no escape for the responsible person, because the obligation avoids the corporate "veil" as it's called in legal parlance.
If you were paid, then even though your W-2 may be incorrect, you have an obligation to report and pay your income taxes
. When you file your tax return
, provide the W-2 that you are given by the employer, but report the total amount you received as wages. The IRS computer system will flag the error and you will be sent an audit
letter. You will explain what happened, and the IRS will go after the employer for the unremitted taxes.
if you want to be sure that you have the money to pay your taxes and you do not want an underpayment liability, then you can remit a tax payment
to the IRS now, for the wages you have already received. You can calculate your tax liability
by using software
at this link.
You can file your tax payment with a 1040-ES voucher
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