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Employer Administative Error. What do I do after I already filed?

Marysville, WA |

My previous employer sent out a second W-2 (not corrected just additional), stating that due to an administrative error Stock Option Exercises were never reported on the 2011 W-2. I already filed my return. They did not send out this letter with the additional W-2 until March 26th, which I received on April 9th.

What should I do? If I file an amended return is there any way to make them pay the cost for their screw up?

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Attorney answers 2


1040X is a replacement return.

You can prepare a 1040X with new W-2 and include a copy of the earlier (defective) return and earlier (defective) W-2. It would be optional to highlight the replacement W-2 or by cover letter stating what is enclosed.

If you include payment and prove the date of submission before April 15, you would hopefully get ahead of the machinery that might try to provide some deficiency calculation.

Paying for the error is up to your employer. This is difficult as time spent might be a few changes to your forms, reprinting and re-filing for some people. Others may have extensive other holdings and a re-do on their tax filings might cost over $1000. (very uneven effect among employees)

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Curt Harrington
(562) 594-9784

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.



thank you. As follow-up. The second W2 only included the information not added to the original, so it isn't a new completed or corrected w2. It just an oopss here is what we forgot w2. Do I still use the same form? Also, I was getting a refund not having to pay. Does any of this make a difference or do I use the 1040X?

Curtis Lamar Harrington Jr

Curtis Lamar Harrington Jr


When you exercise your stock options it increases your tax unless you made a previous 83b election in an earlier year before vesting. Putting the W-2 together by stapling is good. Keep copies of both forms. If the tax realization does not change, then maybe the original 1040 is ok, however, IRS does not keep records on your 83b elections handy. If it was an 83b election, you may want to send a copy of it with the new stapled W-2 set, and maybe a more complete explanation (which should have been handed in anyway) letting them know and identifying for them the 83b association with the statement of exercise in the new W-2


You might politely request your employer pay the cost of amending your return. Unfortunately, the new W-2 should follow the W-4 you submitted to determine the level of withholding, and you are ultimately responsible for additional tax due (if any). Moreover, it does not seem that there would be any additional penalties or interest that you would not already be responsible for (i.e., if you under-witheld). If you need someone to take a look at your return, I am in you area. I can be reached at (425) 451-9572.