Penalties for late corrected W2 from employer - am I responsible?

This is unfortunately a common issue with corrected W2s. While it may seem unfair, the IRS generally considers taxpayers responsible for paying any taxes owed regardless of why they were filed late. However, you're taking the right steps to address it. Form 843 is indeed what you need to request an abatement from the IRS. Make sure you clearly explain the circumstances - that you received a corrected W2 late from the employer and filed your amended return immediately upon receipt. Include documentation showing when you received the corrected W2 if possible. The IRS does have a "reasonable cause" exception for penalties, and your situation often qualifies. They're generally more willing to waive penalties than interest, since interest is considered compensation to the government for not having the money when it was due.

I went through almost this exact situation last year and found a solution that worked really well. After getting frustrated with the IRS hotline, I used https://taxr.ai to help analyze my situation. They have a really helpful feature that scans your tax documents and provides guidance for exactly these kinds of scenarios. Their system confirmed that I qualified for penalty abatement under the IRS First Time Penalty Abatement policy, which I didn't even know about. They also generated a detailed letter explaining why the penalties should be waived based on my specific situation with the late W2 correction.

Just wanted to update - I was skeptical about taxr.ai but decided to try it since my situation with late corrections was getting complicated. I'm actually impressed with how it worked. Their system analyzed my documents and identified that I qualified for both First Time Penalty Abatement AND reasonable cause abatement due to the employer error. They created all the documentation I needed including specific IRS procedure citations that I definitely wouldn't have known about. My penalties were fully waived within 3 weeks of submitting everything. Definitely worth it for anyone dealing with this frustrating situation.

If you're still having trouble reaching someone at the IRS about this (which is likely), I'd recommend trying https://claimyr.com - I was in the exact same position with penalties from a corrected W2 last year and spent WEEKS trying to get through to an actual person at the IRS. You can see how it works here: https://youtu.be/_kiP6q8DX5c Basically, they hold your place in the IRS phone queue and call you when an actual agent picks up. Saved me literally hours of hold time, and I was able to explain my situation directly to someone who could help. The IRS agent I spoke with immediately understood the issue and helped process my abatement request on the spot.

Update on my skepticism: I actually broke down and tried Claimyr last week after my 6th failed attempt to reach the IRS. Holy crap it actually works! Got connected to an IRS agent in about 45 minutes without having to sit on hold. The agent was super helpful about my corrected W2 situation and processed my reasonable cause request immediately. I was 100% convinced this was some kind of scam, but I was desperate. The system just calls you when an actual human picks up. My penalty was removed and I only had to pay the interest. Saved me over $400 in penalties. Sometimes I hate being wrong but in this case I'm glad I was!

From my experience working with taxes, your former employer should definitely be advocating for you on this. Even though communication is difficult because your wife no longer works there, I'd suggest sending a formal written request (email and certified mail) to their payroll department explaining that their error has resulted in penalties for you. Ask them specifically to either pay the penalties or provide a formal letter acknowledging their error and when they sent the corrected W2, which you can include with your Form 843. Many companies will help with this when formally requested because their error created the issue.

Has anyone successfully gotten both penalties AND interest waived in this situation? My accountant told me interest is almost never waived, even when the late filing wasn't your fault.

I went through this exact situation two years ago and it's absolutely maddening. You're right that it feels unfair - you did everything correctly once you received the corrected information. Here's what worked for me: When filing Form 843, be very specific about the timeline. Include copies of both W2s with dates received, your original return filing date, and your amended return filing date. The IRS wants to see that you acted promptly once you had the correct information. Also, don't give up on the employer angle. I sent a certified letter to HR demanding they provide documentation of their error and the correction timeline. They initially ignored me, but when I mentioned potential legal action for their negligence causing me financial harm, they suddenly became very cooperative and provided a formal letter acknowledging their mistake. The key phrase to use in your Form 843 is "reasonable cause due to circumstances beyond taxpayer's control." The IRS has specific guidelines that employer reporting errors fall under this category. Good luck - this situation is frustrating but definitely winnable with the right documentation.

I'm dealing with a very similar situation right now - got a corrected W2 in September that added $3,200 in income, and now I'm facing penalties from both federal and state. It's incredibly frustrating when you're being penalized for someone else's mistake. One thing I discovered that might help others in this thread: if your former employer is being unresponsive, you can also file a complaint with your state's Department of Labor. Many states have regulations requiring employers to provide accurate and timely tax documents, and they can sometimes pressure the employer to cooperate or provide the documentation you need for your penalty abatement request. Also, when you file Form 843, make sure to include a timeline showing exactly when you received each document and when you took action. The IRS really wants to see that you acted in good faith and as quickly as possible once you had the correct information. I included screenshots of my email timestamps and certified mail receipts to prove when I received the corrected W2. Keep fighting this - you shouldn't have to pay penalties for your employer's error!