Understanding IRS Penalties for Incorrect W-2

Depending on the type and date of the violation, the IRS may impose substantial fines for filing false W-2 forms. Errors include giving false employee information, failing to complete documents on time, or reporting wages or tax withholdings incorrectly are subject to penalties. Depending on how soon the error is fixed after the filing date, the penalty amount fluctuates; larger fines are assessed for delays longer than 30 days. Additionally, employers risk fines for not providing employees with updated W-2 forms on time, which might affect their capacity to submit proper tax returns.