Haskel LaPort wrote:
- quote -

Doesn't matter a whit what employer did or did not do. The major
problem here is determine correct and true income with associated
withholdings.

ChEAr$,
Harlan Lunsford, EA n LA

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"Harlan Lunsford" <hnslunsford[at]bellsouth.net> wrote in message
news:aZOJj.18263$%15.9053[at]bignews7.bellsouth.net...
- quote -

Well what would you do if the amount(s) withheld on the paycheck are greater
than the employee's actual tax liability? Did the employer file payroll
returns and remit all taxes? Does it matter from the employee's stand point
if the employer never paid the taxes?



- quote -

- please trim the post to which you are replying

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Haskel LaPort wrote:
- quote -

Now I have to disagree with this treatment. The key to the problem is
that although company issued the checks, they qualified them by saying
dont cash them yet; or now; or next week, or until we tell you to. And
they never did.

So when you know a check's no good, you don't have constructive receipt
of the income.

One way to go would be to prepare a paper return for client listing only
the verifiable wages on line 7, and verifiable income tax withheld on
line ... 57 (?) with a statement attachment explaining reasons and the
situation in full.

Of course if lower wages affected the EIC available..... ???
What would you do?

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Sounds right. I hope the person also put a claim into the bankruptcy
court, since it is my impression that payroll is one of the highest
priority claims.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<kupchik[at]hotmail.com> wrote in message
news:49786da4-d68e-4589-bc1c-6794507e023f[at]c65g2000hsa.googlegroups.com...
- quote -

You would record the bad debt on schedule D as a short term loss not as an
itemized deduction on Schedle A.





- quote -

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

If you receive a number of paychecks that you do not cash, because
your company has told you to hold on to them (they do not have the
money in the bank) and these paychecks are reported on your W-2 - how
do report the non-receipt of income. The company is now in bankruptcy
and no longer exists.

Should you report the W-2 as received and write-off the non-receipt of
pay as a bad debt on schedule A?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >