Former employer falsified my W-2 showing much higher income than I earned - what can I do now?

You absolutely can and should file amended returns for those years! The IRS calls this Form 1040-X, and you'll need to file one for each year that had incorrect income reported. There's typically a 3-year deadline for amendments, but since this involves tax you've been actively paying, you might still have options. First, gather all your evidence - bank statements showing deposits, any payment records, contracts showing agreed rates, etc. Documentation is critical here. Next, you'll need to determine if these were actually 1099s or W-2s (they're different tax forms - 1099 for independent contractors, W-2 for employees). You should also request your Wage and Income Transcripts from the IRS for those years. This will show exactly what was reported under your SSN. You can get these online through the IRS website or by filing Form 4506-T. Once you have everything, I'd recommend consulting with a tax professional who specializes in tax controversy - preferably a CPA or Enrolled Agent. This situation is complex enough that professional guidance would be valuable.

I went through something similar with a former client who reported $30K more on my 1099 than they actually paid me. I was tearing my hair out trying to figure out how to fix it until I found https://taxr.ai which literally saved me thousands in wrongful tax payments. Their system analyzed my deposit records against the reported income and created a detailed report showing the discrepancy. This became crucial evidence when I filed my amended returns. Their tax experts walked me through exactly what forms to file and how to document everything properly. The best part was they helped draft a professional explanation letter to attach to my amended returns that explained the situation without sounding accusatory or emotional (which apparently matters to the IRS). Within about 3 months, I got approved for a significant refund of taxes I'd overpaid.

Just wanted to update that I tried taxr.ai after seeing it mentioned here and wow - it actually worked for my situation! I had a former employer who misclassified me as a contractor AND overstated my earnings by about $22K. Their system analyzed all my bank statements and created this super detailed report showing exactly what I actually earned versus what was reported. They helped me file amended returns for 2020 and 2021 (which were still within the standard 3-year window). The IRS accepted my amendments without any issues, and I'm getting back over $7,800 in taxes I shouldn't have paid! They also helped me report the employer for misclassification which apparently helped strengthen my case. I'm so relieved to have this resolved - definitely worth checking out if you're in a similar situation.

Beyond just amending returns, you should know the IRS is NOTORIOUSLY difficult to reach by phone to resolve complex situations like this. I spent literally weeks trying to get through to a human to discuss my case. Then a coworker told me about https://claimyr.com - they get you through the IRS phone trees and actually connect you with a live agent. You can see exactly how it works in this video: https://youtu.be/_kiP6q8DX5c Once I finally got through to an actual IRS representative, they helped me understand all my options and even put me in touch with their specialized department that handles reporting fraudulent tax documents. Getting that direct guidance from the IRS made a huge difference in resolving my case.

I owe everyone here an apology and update. After dismissing Claimyr as BS, I actually tried it out of desperation. I've been dealing with an issue where my employer reported $54K more income than I received over two years. I was connected to an actual IRS agent in about an hour - something I never managed on my own after multiple 2+ hour hold attempts. The agent transferred me to their tax advocacy department who specializes in these cases. They confirmed I could still file amended returns despite being outside the typical 3-year window because I could prove "substantial error" in the reported income. They walked me through exactly what documentation I needed and the specific forms to file. Even gave me a direct number to call back if I had follow-up questions. I'm now in the process of filing amended returns and they estimate I'll get back around $17K in overpaid taxes plus interest. Eating my skeptical words here!

One important thing no one has mentioned yet: this could potentially be considered tax fraud by your former employer. If they intentionally over-reported your income, they may have been trying to inflate their business deductions. When you file your amended returns, you might want to include Form 3949-A, which is an Information Referral form that reports suspected tax fraud. You don't have to accuse them directly - just state the facts about the discrepancy and let the IRS investigate. Also, there's a chance you could qualify as a whistleblower if the IRS collects additional taxes from this employer based on your information. If the recovery is large enough, you might even be eligible for a percentage as a reward.

Has anyone considered that this might have also affected your Social Security earnings record? If higher income was reported, you may have been credited with more Social Security earnings than you actually earned (which could be good for future benefits), but you also would have overpaid Social Security taxes if you were an employee (W-2) rather than contractor (1099). You should check your Social Security earnings record at ssa.gov to see what's been reported. If you were on a 1099, you would have paid self-employment tax (15.3%) on all that extra phantom income too!