I accepted a job with a company who I later found out had lied to me throughout the interview process and misrepresented the job. I resigned after less than a month. Over a month later (and 3 payroll cycles later) the company sent an email that they had erroneously deposited a payment in one of my bank accounts. Now they are saying that I have to send them the money back as a cashier's check by a certain date to 'avoid further action.'
I am concerned that even if I sent them money, that they will mistakenly report this error on their part as income to the IRS will I would be charged taxes on. I cannot count on them handling this correctly on their side and want legal protection.
So do I have to return the money?
What are the consequences for not returning the money?
Can I force them to sign and send a letter that they will be legally and financially responsible for any misrepresentation on taxes?
If I send the money back, how much can I charge for not just the costs of mileage, cashier's check and certified mail, but also be compensated for my time and inconvenience? As I don't work for them they should be held accountable for any costs, time, etc.
Yes, you must give the money back, it's not yours. Why do they not do a reverse charge against the bank account they sent the money to? If you do not give the money back, you could be charged with theft.
You could have an attorney draft an errors and receipt agreement (you are not qualified to do so) for your former employer to sign before the money is returned by your attorney.
If they error and issue you a W-2 with the "extra" payment, you can ask for a revised W-2 or deal with the IRS to correct the entry.
I agree with Mr. Gates. To keep the money now that you are aware it was deposited in error is theft. I also agree that an errors and receipt agreement should be drafted by an attorney.
As a practical matter, the company has an incentive to properly account for the money because they don't want it to show up as income twice (originally and when you return it). That should also result in a correct W-2. However, if you end up with an erroneous W-2 that is not corrected, having the errors and receipt agreement will be evidence of the error if you have to deal with the IRS. That said, the letter or email they sent you claiming the extra payment and the bank records showing the extra payment and that you returned the funds are also evidence for this.
You also asked about charging them costs for returning it. It is their money and they don't have to pay you or reimburse you to return it. Your bank may issue a single cashier's check for free. However, you can always ask. Actually, as it is their error and not something you did, requiring a cashier's check may not be reasonable. You may want to ask them to permit you to use an electronic transfer through paypal or the bill pay feature of your account, which would eliminate all your costs and also remove concerns they may have about a personal check.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
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