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IRS Announces Penalties for Incorrect Forms W-2, Wage and Tax Statement

HomeWork Solutions, Inc., June 2002

The Social Security Administration has been returning forms W-2 with name/number mismatch problems to employers for corrections for the last several years.

The Internal Revenue Service announced in May 2002 that they will begin to assess penalties to employers filing Forms W-2 with mismatched names and Social Security numbers. A mismatch occurs when the name associated with a SSN does not match agency records. IRS’s Thomas Burger of the Small Business and Self-Employed Division announced that the directive is to apply the penalty program to Forms W-2 filed for tax year 2002 and thereafter. Notices of the proposed penalty, which is calculated at a $50-per-incorrect-form rate, will be issued starting in June 2004 for tax year 2002 W-2s, according to the source.

The Social Security Administration has identified the name/number mismatch problem as the main reason for individual wage record discrepancies.

Employers are encouraged to confirm that their employee’s name on file with HomeWork Solutions exactly matches the name as printed on the employee’s Social Security card.

To check the name/SSN match of up to 5 employees, there is a toll free number for employers, 800-772-6270. SSA will request the caller’s name, Federal Employer Identification Number (FEIN), and full telephone number (area code included). The caller is then to provide current or former employee name(s), SSN(s), date(s) of birth, and gender.

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