Social security statement says I have no earnings for several years

[sunshine]

 I got  a social security earnings statement. It has me having zero earnings and of course  no SS or medicare withholding. I did work all 3 years for the same company. I contacted another former coworker who has a birthday a day from mine figuring he also would have gotten the statement. Same thing. I contacted 2 more and they looked theirs up. same thing. I talked to the IRS and sent in W2's for those years . They said it should take about 90 days. The taxes were withheld from me but never paid. So what happens from here?

[frugaldrummer]

Wow - what a bummer!  I imagine you sue your employer - of course, if they've gone bust there may not be anything to get.  I'd ask the IRS - maybe they have a program to recover that stuff for you.

Guess that's a good reason to check your social security earnings statement every year.  They used to mail them to you, but now you can only check it online I think.

[AH013]

I'm confused...did you not file taxes those years?  Because either there is some huge IRS system error I've not heard of, or your firm failed to report your earnings AND you failed to file so now the IRS is just learning about this issue.  I mean if you filed those years and said you earned $x and the IRS received no W2 from your employer they'd gladly take your word that you earned income and owe taxes on it and credit your SS benefit for the amounts charged/paid even in the absence of a W2.

What happens from here is pretty simple.  Since it sounds company-wide (your coworkers also have no reported earnings from the company, I assume this is true to more than just you 5) and long-running (3+ years), your company is probably going to be charged with some sort of tax evasion scheme and will be fined silly which may cause them to go out of business, especially if they have been "withholding" your money for taxes and have just "forgotten" to actually remit the funds to the IRS for 3+ years.

1)  Start job searching if you still work there...companies usually scam taxes because they've run out of legitimate earnings and try to keep afloat.  Even without being exposed or fined they may be on their last legs and you won't know it until they don't make payroll.  Even if this is just a big mix up and they're financially healthy the ensuing chaos from the audit will be disastrous to operations.
2)  Remind the IRS that you tipped them off.  Whistle-blowers are usually entitled to some 10% finders fee of the fines & penalties if they blow the lid off a tax scam that is prosecuted and collected.
3)  File your taxes from now on (assuming you didn't for those missed years for reasons mentioned)

Also, unclear and maybe relevant -- do you function as independent contractors for the company?  Because if so, you would be responsible for remitting taxes, not the employer, and then everything I said is moot and you're actually the one the IRS will come after.  You said W2, and not 1099-MISC, but people sometimes say W2 when they just mean work income tax forms.

[Sid Hoffman]

OK, so this thread kind of scared me.  I haven't gotten a letter from the SSA in forever.  I literally can't even remember when I last got anything from them in the mail, so I decided to create my own account at SSA.gov.  It only took about 5 minutes.  Now I can view my SSA history online any time I want to and verify that it's accurate.  Maybe this post can serve to help others by directing others to create your own account at SSA.gov and verify your own earnings history?

[sunshine]

I'm confused...did you not file taxes those years?  Because either there is some huge IRS system error I've not heard of, or your firm failed to report your earnings AND you failed to file so now the IRS is just learning about this issue.  I mean if you filed those years and said you earned $x and the IRS received no W2 from your employer they'd gladly take your word that you earned income and owe taxes on it and credit your SS benefit for the amounts charged/paid even in the absence of a W2.

What happens from here is pretty simple.  Since it sounds company-wide (your coworkers also have no reported earnings from the company, I assume this is true to more than just you 5) and long-running (3+ years), your company is probably going to be charged with some sort of tax evasion scheme and will be fined silly which may cause them to go out of business, especially if they have been "withholding" your money for taxes and have just "forgotten" to actually remit the funds to the IRS for 3+ years.

1)  Start job searching if you still work there...companies usually scam taxes because they've run out of legitimate earnings and try to keep afloat.  Even without being exposed or fined they may be on their last legs and you won't know it until they don't make payroll.  Even if this is just a big mix up and they're financially healthy the ensuing chaos from the audit will be disastrous to operations.
2)  Remind the IRS that you tipped them off.  Whistle-blowers are usually entitled to some 10% finders fee of the fines & penalties if they blow the lid off a tax scam that is prosecuted and collected.
3)  File your taxes from now on (assuming you didn't for those missed years for reasons mentioned)

Also, unclear and maybe relevant -- do you function as independent contractors for the company?  Because if so, you would be responsible for remitting taxes, not the employer, and then everything I said is moot and you're actually the one the IRS will come after.  You said W2, and not 1099-MISC, but people sometimes say W2 when they just mean work income tax forms.

I actually got the statement in the mail recently as did the former coworker. My spouse got one also recently. I had not gotten on in years nor had the coworker or my spouse.

  I was not a self contractor but a  fully commissioned .

 All pay stubs showed the taxes being taken out as did the year end W2's for 2010, 2011 and 2012.

 I filed my taxes in 2010, 2011 and 2012 just like normal from the W2 the company gave me(  as did the coworkers also showing zeros for the same years on the social security statements.)  I was shocked as all get out to see the statement showing 3 years of zero earnings show up in the mail.

  I left 18 months ago as payroll started bouncing and there were lots of  IRS certified letters and and occasional IRS visitor from our state.  We got nosy and searched our states site and could see they were behind on state taxes and unemployment. I can see that was caught up.  It was and is a very small business.  The business is  mess but still open.

I sent in the requested copies of W2's to the IRS and they opened a case. My main concern is I get credit for those years because the $ left my paychecks.  As far as suing I don't believe I would ever get my $. Owner barely saved a home from bankruptcy  ( that isnt worth crap) at the last minute and has a floundering business, is  almost  70 years old with a disabled spouse.  I saw the collection notices coming in and took those calls for about 9 month before I left. I had previously worked for them happily for 15 years. 

I dont really care about  a finders fee. I just want credit for what was taken out of my checks.

[sunshine]

OK, so this thread kind of scared me.  I haven't gotten a letter from the SSA in forever.  I literally can't even remember when I last got anything from them in the mail, so I decided to create my own account at SSA.gov.  It only took about 5 minutes.  Now I can view my SSA history online any time I want to and verify that it's accurate.  Maybe this post can serve to help others by directing others to create your own account at SSA.gov and verify your own earnings history?

My spouse or I also had not received anything in 5 or more years I would say. My spouse received it last month and I  this month. They must be doing them periodically or something now. I will certainly be watching after this.

[AH013]

I actually got the statement in the mail recently as did the former coworker. My spouse got one also recently. I had not gotten on in years nor had the coworker or my spouse.

  I was not a self contractor but a  fully commissioned  stylist.

 All pay stubs showed the taxes being taken out as did the year end W2's for 2010, 2011 and 2012.

 I filed my taxes in 2010, 2011 and 2012 just like normal from the W2 the company gave me(  as did the coworkers also showing zeros for the same years on the social security statements.)  I was shocked as all get out to see the statement showing 3 years of zero earnings show up in the mail.

  I left 18 months ago as payroll started bouncing and there were lots of  IRS certified letters and and occasional IRS visitor from our state.  We got nosy and searched our states site and could see they were behind on state taxes and unemployment. I can see that was caught up.  It was and is a very small business.  The business is  mess but still open.

I sent in the requested copies of W2's to the IRS and they opened a case. My main concern is I get credit for those years because the $ left my paychecks.  As far as suing I don't believe I would ever get my $. Owner barely saved a home from bankruptcy  ( that isnt worth crap) at the last minute and has a floundering business, is  almost  70 years old with a disabled spouse.  I saw the collection notices coming in and took those calls for about 9 month before I left. I had previously worked for them happily for 15 years. 

I dont really care about  a finders fee. I just want credit for what was taken out of my checks.

The law is on your side as long as you can provide proof (through pay-stubs or W2s from your employer) that taxes were withheld, which proves your employer failed to remit those taxes properly.  Your former employer is in some deep shit though.  The good news for him is he doesn't need to worry about his home that he saved from bankruptcy (probably using your tax money withheld) or his disabled spouse.  The IRS will be happy to take his home from him to partially settle his debt/penalty for his crime and provide them both with lovely orange jump suits if they both signed off on their taxes.
http://www.justice.gov/usao/nys/pressreleases/January15/PatrickWhitePlea.php

I feel some sympathy given his age, but it really frustrates me that people steal taxes instead of dealing with their personal situation and what he probably should have done if the business was failing (close the business).  I mean if he had only bailed probably 4-5 years earlier when it was clear the business was going under instead of stealing taxes all these years to keep it propped up he could probably be living a decent life off of social security instead of being behind bars soon.

[sunshine]

I actually got the statement in the mail recently as did the former coworker. My spouse got one also recently. I had not gotten on in years nor had the coworker or my spouse.

  I was not a self contractor but a  fully commissioned  stylist.

 All pay stubs showed the taxes being taken out as did the year end W2's for 2010, 2011 and 2012.

 I filed my taxes in 2010, 2011 and 2012 just like normal from the W2 the company gave me(  as did the coworkers also showing zeros for the same years on the social security statements.)  I was shocked as all get out to see the statement showing 3 years of zero earnings show up in the mail.

  I left 18 months ago as payroll started bouncing and there were lots of  IRS certified letters and and occasional IRS visitor from our state.  We got nosy and searched our states site and could see they were behind on state taxes and unemployment. I can see that was caught up.  It was and is a very small business.  The business is  mess but still open.

I sent in the requested copies of W2's to the IRS and they opened a case. My main concern is I get credit for those years because the $ left my paychecks.  As far as suing I don't believe I would ever get my $. Owner barely saved a home from bankruptcy  ( that isnt worth crap) at the last minute and has a floundering business, is  almost  70 years old with a disabled spouse.  I saw the collection notices coming in and took those calls for about 9 month before I left. I had previously worked for them happily for 15 years. 

I dont really care about  a finders fee. I just want credit for what was taken out of my checks.

The law is on your side as long as you can provide proof (through pay-stubs or W2s from your employer) that taxes were withheld, which proves your employer failed to remit those taxes properly.  Your former employer is in some deep shit though.  The good news for him is he doesn't need to worry about his home that he saved from bankruptcy (probably using your tax money withheld) or his disabled spouse.  The IRS will be happy to take his home from him to partially settle his debt/penalty for his crime and provide them both with lovely orange jump suits if they both signed off on their taxes.
http://www.justice.gov/usao/nys/pressreleases/January15/PatrickWhitePlea.php

I feel some sympathy given his age, but it really frustrates me that people steal taxes instead of dealing with their personal situation and what he probably should have done if the business was failing (close the business).  I mean if he had only bailed probably 4-5 years earlier when it was clear the business was going under instead of stealing taxes all these years to keep it propped up he could probably be living a decent life off of social security instead of being behind bars soon.

Thanks for the reply. I have a W2 for every year as proof. You know we could never figure out why the business was behind to be honest. We couldn't keep up with new customers. Always busy. . I personally thought there may have been a gambling problem as the owner went to the casinos a lot. He always spoke of being comped. You have to spend a lot to get comped at the casinos. It really made me sad to leave as I did like the owner quite well as a person after years. I hate to see him end up in jail but I guess if you steal you get the punishment. I am hoping this is some kind of big mistake and not theft. It doesn't look good though.

[geekette]

The SS office quit mailing the statements for a while to save money, but that didn't go over too well. They're now mailing them basically on the 5 year marks.

Link

[Sid Hoffman]

The SS office quit mailing the statements for a while to save money, but that didn't go over too well. They're now mailing them basically on the 5 year marks.

Link

Yeah I found a similar article and was about to post about it, but you beat me to it.  What I did also find however is that it's in your best interests to create an account at SSA.gov.  If you do not, somebody else might create an account using your SSN and then request disability and/or retirement benefits mailed to them in your name.  You potentially wouldn't find out about it until you tried to apply for benefits yourself because they could also suspend paper statements being mailed to you while they create your account on the website.  So I would still strongly recommend everyone create their SSA.gov account for the sake of identity theft protection.

[Professor Ecks]

The SS office quit mailing the statements for a while to save money, but that didn't go over too well. They're now mailing them basically on the 5 year marks.

Link

Yeah I found a similar article and was about to post about it, but you beat me to it.  What I did also find however is that it's in your best interests to create an account at SSA.gov.  If you do not, somebody else might create an account using your SSN and then request disability and/or retirement benefits mailed to them in your name.  You potentially wouldn't find out about it until you tried to apply for benefits yourself because they could also suspend paper statements being mailed to you while they create your account on the website.  So I would still strongly recommend everyone create their SSA.gov account for the sake of identity theft protection.

Keep in mind that when someone files for Social Security benefits, they will be required to provide proof of identification and citizenship (usually driver license and birth certificate, or a valid US passport). So the likelihood of someone sucessfully filing for benefits on someone else's record is pretty low.

That said, once you have filed and been approved for benefits, you are allowed to update your address and bank account information through your SSA.gov account. So, if you haven't already established the account, someone else could do so if they had enough personally identifying information about you. THEN, they could re-route your payments to the account of their choice. This is a FAR more likely scenario.

In the end, the advice is the same. Establish a MySocialSecurity account as soon as possible to reduce your risk of fraudulent activity on your account.

[sunshine]

This got all fixed and I got credit for my earnings. Thats the only part I care about :)

[Cheddar Stacker]

This happens more than people would think. I've never heard of anyone collecting a finder's fee for reporting it. The thing is, the IRS knows about it immediately since it's all reported through the payroll reports, including the quarterly tax returns they file and their regular tax remittances that go along with it. You wouldn't be reporting a fraudulent scheme, you'd be reporting a deadbeat long after the IRS discovered them.

Here's how this happens:
-Business starts to have annual losses.
-Business takes on debt to fund cash flow and hopefully wait out the downward trend.
-Downward trend continues, and business takes on more debt.
-One month they use their last available leverage to make payroll.
-No cash is left to remit the payroll taxes a week later, owner thinks "I'll make that big sale soon and remit them at the next payroll".
-Big sale never comes, wash, rinse, repeat.
-IRS comes knocking and wants taxes plus 25% penalties plus 5% interest.

Lesson: Don't use the IRS when you need leverage, they are a bad creditor to deal with.

I'm not trying to justify it, just letting you know it happens a lot, and it's easy to understand how it's possible. I think the owner is guilty of having too big an ego to admit he/she is losing control of their business. I don't think most times it's intentional or malicious.

sunshine, I'm glad it worked out for you.

[sunshine]

As long as mine is fixed I'm good :) The IRS had myself and other employees down as making zero dollars from her for the 3 years as well as no SS taxes paid in. It is also going a bit deeper with our income reported to the IRS for previous years not matching up with pay stubs for some employees. There is also a problem with current employees having tips on their last W2 in excess of earnings. I'm just very glad to be all done with the whole thing and that previous employer.