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Gm I want to know if money stolen from and employer be added…

Customer Question
Gm I want to...

Gm I want to know if money stolen from and employer be added to a W2 and can I be ordered to pay restitution as well

Lawyer's Assistant: What province is this in? It matters because laws vary by location.

I am in texas dallas

Lawyer's Assistant: What steps have you taken so far?

Well they added to my w2 so i had to pay the irs back and i was ordered to pay the company the money as well, seems like double payment to me. if i have to pay it back should have never been added as earnings. company got tax credits for it. i understand its taxable should i have been given a 1099 instead.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

I am on probation. i can get the case dismissed if i can verify the company handled it wrong

Submitted: 3 months ago.Category: Legal
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Answered in 5 minutes by:
3/27/2018
Lawyer: Loren, Attorney replied 3 months ago
Loren
Loren, Attorney
Category: Legal
Satisfied Customers: 38,801
Experience: 30 years experience representing clients.
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Thank you for using JA. I am Loren, a licensed attorney for over 30 yrs., and I am here to help.

I am a certified expert on JustAnswer since 2009, with nearly 100% in satisfied customer ratings. So, we should be able to work through your problem.

I appreciate your patience as I review your question. I will post my response shortly.

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The site may ask you if you wish to speak by phone for an extra charge. Many find the phone call to be the easiest and fastest way to get the information they need without posting on a public forum. I am also happy to continue online.

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Lawyer: Loren, Attorney replied 3 months ago

The tax code stipulates that all of an individual’s income and gains are includible in gross income, whether it was derived from legal or illegal means.

Though employers may wish to report the income on Form W-2 or Form 1099-MISC, the best option is to use Form 3949A. This is an Information Referral form for reporting potential violations of the Internal Revenue laws. The victimized organization can provide information about the embezzler such as name and address, social security number, alleged violation (i.e., unreported income), suspected amount of unreported income by year, and any additional comments.

It should not be reported on W2 or 1099 forms to the employee. These forms do not meet the required criteria. W-2s are submitted to report compensation from work performed, and Form 1099-MISC is intended to be used to report payments made to a “non-employee” for fees, commissions, prizes, and awards. Further, by issuing a Form 1099-MISC to a current or former employee who is also receiving a W-2 from the same organization can cause a conflict to occur at the governmental agency level that could result in a rejection of one or both of the form submissions.

Reporting on the wrong form is not grounds for the charges to be dismissed. It may just get the filings rejected.

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Customer reply replied 3 months ago
what are my options if the money was reported on a w2? That turns money into earnings correct and it is no longer stolen property correct?
Lawyer: Loren, Attorney replied 3 months ago
It is still stolen property, but it is misreported. It is also still income which is required to be reported.
Contact the IRS and file a complaint if your W-2 is obviously and significantly wrong and you suspect dishonesty or bad faith on the part of your employer. The IRS will investigate the matter directly with him. You can call the IRS toll-free at 1-***-***-****.
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Customer reply replied 3 months ago
Thanks so much on last question.. I understand it’s still stolen income and should have been reported differently.. so because they handled the reporting wrong is there a publication I can us to show how it should have been reported and if I was ordered to pay restitution on this money and it was mis reported is there something I can do?
Lawyer: Loren, Attorney replied 3 months ago

There are court cases holding restitution payments to be income to the victim and to be tax deductible to the payor.

The misreporting would not affect that or the obligation to repay.

However, it may make for an interesting defense, since the company has classified it as earnings and, therefore, an authorized payment for services.

I am happy to continue if you have further questions.

If (and only if) you are completely satisfied that your question is answered professionally and accurately, even if not the answer you were hoping to get, please remember to leave a favorable rating (click 5 stars in the rating section on this page). It is the only way that I am credited by JustAnswer for answering your question.

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Customer reply replied 3 months ago
I am not disputing the restitution part I get that .. but if the money was added to earnings reported on a w2 you are saying you are paying me for a service correct? How should I have reported to IRS for tax purposes?
Lawyer: Loren, Attorney replied 3 months ago

It could have been reported as informational by the employer and then the burden is on you to self report it.

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Lawyer: Loren, Attorney replied 3 months ago

Are you still online with me?

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Customer reply replied 3 months ago
I am
Lawyer: Loren, Attorney replied 3 months ago

Did you have further questions? Have I answered your question? Please let me know.

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Customer reply replied 3 months ago
I know it’s not grounds for dismissing the case but what would u advise I do cause to me I have paid the irs because company got tax breaks and they are asking me to pay restitution as well that’s double payment to me
Lawyer: Loren, Attorney replied 3 months ago

When you pay restitution you can take a tax deduction for the restitution payments in the year they are made. The employer will have to report the payments as income.

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Customer reply replied 3 months ago
What happens if they don’t or are they made? But it still doesn’t take away the fact they put it on my w2 and I had to pay over 8 thousand dollars to irs because it looked like I under reported the money how do I fix that
Customer reply replied 3 months ago
Sorry so many question I’m just convinced this was handled all wrong to begin with
Lawyer: Loren, Attorney replied 3 months ago

You can try filing an amended return, after paying restitution, for the year the taxes were assessed, but I do not think that will fly with the IRS, though.

You can not evade the taxes on the amount taken. It is still counted as income.

I am sorry. I wish I could tell you otherwise, but I do not want you spinning your wheels and incurring further liability.

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Customer reply replied 3 months ago
I have to accept the company misreported income and pay restitution?
Lawyer: Loren, Attorney replied 3 months ago

Unfortunately, yes. It is reported as income, whether illegal or not.

Also, it is taxable, whether illegally gained or not.

Again, I am sorry to be the bearer of bad news.

If you have no further questions, and have not yet done so, please remember to leave a favorable rating (click 5 stars in the rating section on this page). It is the only way that I am credited by JustAnswer for answering your question.

There is no additional charge to you for rating me favorably.

A bonus is not expected, but is always appreciated.

Thank you for using JA.

Loren

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Lawyer: Loren, Attorney replied 3 months ago

If you have no further questions please remember to rate my service (5 Stars) so that I am credited by JA for answering your question and also so that I may close the question.

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