I've checked all my mail thoroughly and asked about electronic options too. They definitely haven't sent it either way. From what I've gathered talking to ex-coworkers, they're behind on their payroll administration for everyone, not just me. Just trying to figure out my options since they're being so difficult about it.

This is good advice! I work in HR and employers definitely don't want the Department of Labor breathing down their necks. Mention the potential for penalties and they'll usually prioritize getting your W-2 out.

What's the difference between asking for a "correction" vs an "amendment"? I always thought they were the same thing when it comes to tax returns.

There's actually a big difference! A "correction" is for when the IRS made an error in processing your return (like in this case where they entered data incorrectly). An "amendment" is when you need to change something that was incorrect on your original submission. Corrections are processed through their error resolution department and typically take weeks rather than months. Amendments require filing a new form (1040-X for individuals or 1120-X for corporations) and can take 6+ months to process. Since this is clearly an IRS data entry error, you want the faster correction process.

Does the IRS accept screenshots as evidence though? I thought they only accepted actual signed documents or transcripts from their system.

I hadn't even thought about state taxes! Do I need to file something specific with California to establish that I'm not a resident there? I literally haven't lived there since I was 11 months old.

Since you left as an infant, you should be fine without formally breaking residency - you never established it as an adult. California typically looks at factors like where you have a driver's license, voter registration, bank accounts, etc. Since you have none of these connections to California, you have a very strong case for non-residency. However, to be absolutely safe, you could include a brief statement with your federal returns explaining that you left California as an infant and have no connections to the state. In rare cases, people file Form 540NR (California Nonresident Return) with zero income to formally establish non-residency, but this is usually unnecessary for someone in your situation who never established California ties as an adult.

Renouncing is definitely an option but costs $2,350 in government fees alone, plus you need to be tax compliant for 5 years before renouncing! And if your net worth is over $2 million or your average annual tax liability exceeds $168,000 over the last 5 years, you could face an exit tax. Definitely not a quick or cheap solution.

But that's exactly the concern, right? Without extremely tight definitions, people find ways to game the system. I mean, tipping has expanded to so many industries now - you get tip prompts everywhere from coffee shops to retail stores. Where would they draw the line?

That's a fair point. The expansion of tipping culture does complicate things. I suspect any actual legislation would need to establish criteria like: the worker receives a reduced minimum wage under tip credit rules, the industry has a historical practice of tipping, and the tips are contemporaneous with service rather than contractually required. The IRS and Treasury would likely issue regulations clarifying these boundaries. Similar to how they've handled other tax provisions, they'd establish factors to determine legitimate tips versus disguised regular compensation. The challenge would be enforcement - they're already understaffed for existing tax issues.

I work in payroll software development, and yes, it would be a significant change. We'd need to create new income classifications, update tax withholding algorithms, and modify all the reporting. The IRS would also need new forms. It's not impossible, but would require substantial systems updates.

Can you explain what you mean about S-Corps and "reasonable compensation issues"? My construction business is an LLC but I elected S-Corp status for tax purposes and now I'm confused about how this would work.

With an S-Corp, you need to pay yourself a reasonable salary before taking distributions. If the LLC pays for your education, it could be considered either a business expense or potentially a fringe benefit to you as an employee-owner. If it's clearly related to your current business functions and helps you perform your job better, it can be treated as a normal business expense. However, if the education would qualify you for a new trade or significantly different position, the IRS might view it as a taxable fringe benefit to you personally, which complicates things from a tax perspective.

Is this still true? I thought they changed some of these rules with the Tax Cuts and Jobs Act in 2017? My accountant told me the rules got more flexible.