120 Day Review Due to Unreported Wages - Anyone Experienced This?

Yeah, I've dealt with this before. It's like when your bank shows a pending transaction but the merchant hasn't finalized it yet - the IRS can see you've filed but can't verify against employer records. In my case, it was because I worked for a small business that was consistently late with their quarterly filings. Have you tried contacting your employer's payroll department? Sometimes they don't realize there's an issue on their end.

This happened to me last year when I changed jobs mid-year. I spent weeks trying to decipher my transcript and figure out what was happening. Finally used https://taxr.ai to analyze my transcript and it immediately identified the wage verification issue. It explained that my new employer hadn't reported my Q4 wages yet, which was causing the delay. The site gave me a checklist of what to do, including contacting my employer's payroll department with specific questions to ask. Saved me so much confusion and waiting time.

I went through this exact situation in 2023! My employer merged with another company and somehow their wage reporting got delayed. The IRS put me on a 120-day review, but I only ended up waiting about 75 days before everything resolved. Did you get a specific notice from the IRS about this, or are you just seeing something on your transcript? Have you checked if your wage and income transcript shows your W-2 information?

I experienced a Wage Verification Hold last year due to similar circumstances. The IRS correspondence indicated a standard 120-day review timeframe, however actual processing time varies significantly based on current IRS backlog status. After numerous unsuccessful attempts to reach an IRS representative through conventional channels, I utilized Claimyr (https://www.claimyr.com). Their service expedited my connection to an IRS agent who was able to verify that my employer had subsequently submitted the wage information and accelerated my review completion. The Technical Processing Hold was released approximately 14 days after this intervention.

Be extremely careful with this situation. According to the IRS.gov resources on wage verification issues (https://www.irs.gov/individuals/understanding-your-cp05-notice), these reviews can sometimes extend beyond the initial 120 days. In my case last year, I waited patiently for 120 days only to receive another notice extending the review by an additional 60 days. Make sure you keep all documentation showing you reported accurately based on the W-2 you received, as the discrepancy might be on your employer's end rather than yours.

I successfully navigated this issue last year. According to Internal Revenue Manual 21.5.6.4.35.3, wage verification holds occur when the IRS cannot match your reported income with information reported by employers. In my situation, I contacted my employer's payroll department who confirmed they had a technical issue with their quarterly filing. They promptly submitted a corrected form to the SSA (who then forwards to IRS per IRC §6051(d)). My review was completed in 67 days instead of the full 120. I was quite surprised by how complex the interagency reporting system is!

Watch out - I had this happen and it was a nightmare. My "120 day review" turned into 9 months! 😅 Every time I called, they just said "it's still processing" like a broken record. The problem was my employer used a different EIN on my W-2 than they used for their quarterly filings, so the systems couldn't match them up automatically. Make sure your employer hasn't changed their business structure or tax ID recently. The IRS computers apparently can't handle basic logic when it comes to connecting these dots.

Anyone know if this affects both fed and state returns? My fed return is on hold for this wage verification thing but my state refund came thru already. Kinda confused tbh. Does that mean my state didn't care about verifying my wages or do they have diff systems?

Based on my experience last tax season, the 120-day review is just their standard timeframe they quote, but it doesn't necessarily take that long. When I encountered this in 2023, I found that calling my employer's payroll department was key - they had actually submitted everything correctly, but there was a discrepancy in how my name was formatted (they used my full legal name while I used my common name on my return). Once that was sorted out, my return was processed within about 6 weeks instead of the full 120 days.

Could this actually be a good thing in disguise? When I faced a similar situation, I initially panicked, but it turned out to be beneficial. The review process forced my employer to correct their reporting, which revealed they had actually underreported my wages. My refund ended up being larger than I had initially calculated. Isn't it better to have this caught now rather than years later when an audit might be more complicated?

I'm dealing with something similar right now and this thread has been incredibly helpful! My situation is a bit different though - I received my W-2 from my employer on time, but when I checked my wage and income transcript online, it shows no wage information reported for 2024. I filed my return in early February and got the dreaded CP05 notice about the 120-day review. What's frustrating is that my employer insists they submitted everything correctly, but clearly something went wrong in the transmission to the SSA. Has anyone had success getting their employer to resubmit the wage information, or do you just have to wait it out? I'm wondering if there's a specific form or process employers need to follow for corrections, since my payroll department seems confused about what steps to take next. Also, for those who went through this - did you get any updates during the 120 days, or does the IRS just stay silent until they're ready to process?