Accountable plan mileage included in W-2

[Margaret CPA in OH]

My niece just called. She was a census worker last year and drove many miles. She was required to submit her mileage for reimbursement at 50 cents per. Now her W-2 shows not only her wages but all the reimbursed mileage money in Box 1. Of course her withholdings did not cover this additional income as it wasn't supposed to be taxed. It is, after all, an accountable plan. Form 2106 is not helpful because the total is subject to the 2% haircut. And of course the office is closed and the contact is the Commerce Department.

Any ideas out there? Thanks!

[kcjenkins]

Just another screw-up by a government agency. The W-2 should not have included the amount in box 1, question is how likely is it to get a corrected W-2? I'd have her try that, [always assuming the amount is significant, of course] and then, if by Feb 15 you have had no luck, you could do a 4852 to adjust the W-2. That form is for not only missing W-2s but also to correct an incorrectly prepared W-2.

[Margaret CPA in OH]

Thanks, KC. I don't think it is realistic to get a corrected W-2 so I will look at the 4852. We'll see how that plays out. I didn't recall that it could be used for an incorrect W-2. Thanks again.

[MAMalody]

I think KC has a good idea. As a prior IRS auditor it always made more sense to me to accept a F4852 when it could be demonstrated that the employer failed to provide or correct a W-2.

[kcjenkins]

That form does ask you what you have done to attempt to get a correct W-2, so I always at least make one attempt, but often it's a waste of time. Too many people today seem to not be willing to take the time needed to correct errors, it's easier [for them] to just brush it off with "The form is correct." But when the amount is significant to the client, it's worth the effort. But since it will delay the return being processed, you always have to consider whether the difference is worth the effort.