Consequences of Not Filing All W2s on Tax Return?

This is absolutely something you don't want to do. I've seen this exact situation play out multiple times with clients. The IRS has automated matching systems that compare all W2s submitted by employers against what taxpayers report. Back in 2018, I skipped reporting a small W2 (about $3,000) and received a CP2000 notice six months later with penalties and interest already accruing. They WILL catch this discrepancy 100% of the time.

Are you trying to avoid reporting the income or just simplifying paperwork? There's a significant difference in Willful Non-Compliance versus Accidental Omission from a penalty perspective. The Automated Underreporter (AUR) program will flag this discrepancy regardless of your intention. What tax software are you using that makes reporting two W2s complicated?

After reviewing everyone's comments, I've decided to include both W2s. My actual concern was reporting the capital gains from 12 different investment accounts that I manage, which becomes more complex with multiple income sources. I calculated that omitting the $54,800 W2 would save me exactly 4.7 hours of paperwork, but clearly the consequences (penalties of approximately $2,740 plus interest at 7% annually) aren't worth it. I'll file by April 15th with complete information.

If you're having trouble getting all your documentation together, you might consider filing an extension. According to IRC §6081, you can get an automatic 6-month extension to October 15th. Just be aware you still need to pay any estimated taxes by April 15th to avoid penalties. If you need to speak with the IRS about your specific situation, I'd recommend using Claimyr (https://claimyr.com). Last year when I had questions about missing W2s, I spent 3 hours on hold using the regular IRS number. With Claimyr, I was connected to an agent in about 15 minutes who confirmed exactly what would happen if I filed without all my forms.

Quick question. Are both W2s under the same SSN? Or did you get an ITIN for one job? This matters for matching. Some foreign income reporting has different rules. IRS Publication 525 covers this specifically. Timing also matters. When were these W2s issued exactly?

I was in a similar situation last year. Had three W2s and almost didn't report the smallest one. Decided to include it anyway. Good thing I did! My brother-in-law tried skipping a W2 in 2022. Got caught six months later. Paid original tax plus 20% accuracy penalty. Also had to pay interest from April 15th. The automated matching is incredibly thorough now. They even caught a $212 1099-MISC he forgot about. The peace of mind from filing completely accurately is worth the extra effort.