What should a taxpayer do after intentionally leaving a W-2 off a return?

Question

AcadiFi · Accepted Answer

The taxpayer should correct the return promptly and honestly. The IRS receives wage information from employers, so omitted W-2 income is often discovered through matching. Waiting for a notice can increase interest, penalties, and stress. A voluntary correction through an amended return is usually the better path than hoping the omission is ignored.

Suppose Bayview Tax Services meets a taxpayer who omitted a $12,400 seasonal W-2 because they wanted a larger refund. The EA should not minimize the conduct, but should focus on correction. The practitioner gathers the missing W-2, recalculates taxable income, credits, withholding, and any balance due, then prepares an amended return if appropriate. The taxpayer should pay as much as possible when filing.

For the EA exam, separate civil correction from criminal fear. Not every wrong return becomes a criminal case, but intentional omissions are serious and can support penalties. Practitioners should avoid advising concealment, should document facts, and may need to recommend legal counsel if the taxpayer describes deliberate fraud and criminal exposure.

The safest exam answer is not panic. It is accurate amendment, payment planning, and ethical representation. For exam purposes, identify the taxpayer type, governing rule, required documentation, timing issue, penalty exposure, and next procedural step before choosing an answer. Practice more in our EA question bank.

What should a taxpayer do after intentionally leaving a W-2 off a return?

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