Oops! Forgot a W2 but refund already processed. Will IRS notice?

How long does the IRS typically take to notice something like this? I had a similar situation last year and I'm wondering if I should expect a letter soon or if it might take months?

The IRS typically processes their matching program in batches throughout the year, so it can take anywhere from 3-18 months for them to send a notice about a discrepancy. Each year can be different depending on their backlog and processing priorities. In some cases, they might not send a notice until the following year when they've processed all employer-submitted forms and completed their matching cycles. If you amend now rather than waiting, you'll typically pay less in interest and potential penalties.

Did it help you figure out if you owed penalties too? I'm in a similar boat but worried about getting hit with a bunch of extra fees.

I'm always skeptical of tax tools. How does it compare to just going to a CPA? I feel like something this potentially serious might need professional eyes.

It actually does calculate potential penalties based on the timing and amount of the discrepancy. It showed me what I might owe in penalties and interest so I wasn't surprised when I got the final bill. As for comparing to a CPA, I found it much more affordable while still being very thorough. The tool basically does a professional-level analysis of your specific situation without having to schedule an appointment or pay the premium fees. That said, for extremely complex tax situations, a CPA might still be beneficial, but for something like a missed W2, this handled everything perfectly.

Wait, how does this actually work? Doesn't everyone have to sit on hold with the IRS for hours? I don't understand how they can get you through faster.

Sounds like BS to me. Nobody can magically get through the IRS phone system. They probably just connect you to some random "tax expert" who isn't even with the IRS.

It uses a callback system that basically waits on hold for you and then calls you when an actual IRS agent is on the line. They use automated technology to navigate the phone tree and stay on hold so you don't have to. They are 100% connecting you with official IRS agents, not their own tax experts. That's the whole point - you're talking to the same IRS representatives you'd reach if you managed to stay on hold for hours, but without the wait. I was skeptical too until I was talking to an actual IRS employee who could access my tax records and everything.

That's terrible advice. The IRS receives copies of all W2s and their system automatically matches them to tax returns. Just because your brother got lucky doesn't mean it's smart to intentionally ignore a known error. The penalties and interest will be much worse if you wait for them to find it.

I'm not saying it's the right thing to do, just sharing what happened in my brother's case. It's ultimately about risk tolerance. For small amounts, sometimes the IRS collection efforts cost more than they'd recover so they don't pursue it. You're right that the proper action is to file an amendment. I was just offering a different perspective based on a real experience. Everyone has to decide their own comfort level with risk.

It depends on your overall tax situation, but as a rough estimate, you'd owe your marginal tax rate on that amount. So if you're in the 22% bracket, that's about $528 plus potential penalties and interest. The penalty for not reporting it can be around 0.5% per month up to 25% of the tax owed, plus interest that compounds daily.

Thanks! That helps put it in perspective. Definitely not worth risking penalties over that amount. I'll go ahead and file the 1040-X.