RE: [taxchat] State Income Tax Witheld

I am under the impression that the IRS does have all the information from the W-2 but that they don't include it in the transcript. I also seem to recall that that there is a way to have the IRS provide this but I'm not sure how this is done and what the costs are.

Actually, if you can get the complete W-2s for $30/year that isn't too bad especially when you consider what most taxpayers in the situation you describe will end up paying in back taxes. Would you briefly describe how to do this.

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Marc Enzi
Sent: Sunday, October 12, 2008 2:38 AM
To: Tax Chat
Subject: RE: [taxchat] State Income Tax Witheld

IRS maintains transcripts of W-2 wage income, FITW, FICA, 401K deferrals, but they do not maintain State Income or Income Tax Withheld.

I have come across a very troubling and common problem with non filers coming in from non compliance and doing there level best to get sorted out with the IRS and their State.

Often they come to me after getting SFRs for several years and the IRS is levying assets and or wages and threatening liens and property seizures. I understand the IRS methodology. What I don't understand is why IRS does not track State Income taxes withheld.

The client is upset and scared of losing everything, and I am trying to help them. I retrieve W-2 and income transcripts, but if there are State Wages I have bad news for the client. I tell them to contact previous emplyers and beg them for those old W-2 copies. The other glimmer of hope I had came when I stumbled upon an SSA procedure whereby you can order W-2 photocopies from Social Security for $30 per tax year.CA maintains the State Wages or State Income taxes collected.

I was really suprised at this, but so far, every state (except CA) I have checked with does not maintain income or income taxes witheld.

I asked the State taxing agencies "if you don't maintain wage or witholding data, how can you tell if a tax return is accurate?"

They told me the IRS reports the Federal income tax data to the State. The tax authorities also stated that they will not accept or process the State return without a W-2 attached.

This is a convenient way to stick it to the taxpayer. The IRS does an SFR, but does not give any credit for State Income taxes, and the State then nails the taxpayer for taxes that wre likely already withheld.

It seems to me that if the client were to asset their State Income taxes withheld, the IRS wouldn't be able to disprove it, nor would the State.

Does anyone out there have some method for retrieving State Income taxes withheld data for past years?

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Pajak

12 Oktober 2008

RE: [taxchat] State Income Tax Witheld

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