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My former employer sent me a check last Friday for 7k now they want 11k back. Florida

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  • My former employer sent me a check last Friday for 7k now they want 11k back. Florida

    My former employer (Big Telecom Comapny) sent me a check last Friday for 7k now they want the gross amount back 11K.

    The Gross amount for the payment was 11k but after taxes it was 7K, On Monday I got a letter saying that I have to pay them 11k, when I was on the phone with customer service (payroll)they said that they sent a check for 11K and that's the amount what I got to pay, and that they paid taxes for me.

    I think is very unfair that I have to pay for their mistakes, I don't have 4k right now.
    I am acting in good faith and I am willing to pay the net amount. and I won't pay more that what I got.
    My accountant said not to pay the gross just the net, and to get everything on writting, and they need to fix my taxes.
    What can I do?
    What is going to happend to my taxes?
    Should I get a lawyer?
    I do not even know if I can pay for a lawyer!

  • #2
    There are two different issues here. Do you owe the money? And if you owe the money, should the repayment be made on a net or gross basis? You seem to be saying that you owe the money, and the only issue is the net vs. gross basis.

    FL has no taxes, so presumably we are talking federal taxes only (FICA/FIT). Under federal rules if the overpayment was issued this year, the repayment should be issued on a net basis. The employer has not even crossed a quarter boundary yet, much less the annual boundary. So per IRS the employer (this year) should recovery the taxes directly from IRS. (If your state had taxes involved, it could not be assumed that all states follow the IRS rules for their taxes). So, I agree with what your accountant apparently said.

    HOWEVER, starting January 1st next year the rules changed. Repayments that cross the annual boundary must be done on a gross basis only.

    ------

    Having said that, while I know what I am talking about (this time), I am a lone voice on the Internet and your employer will not care what I said. You may or may not need a lawyer. Different issue.
    Last edited by DAW; 08-02-2012, 08:06 AM.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

    Comment


    • #3
      Originally posted by DAW View Post
      There are two different issues here. Do you owe the money? And if you owe the money, should the repayment be made on a net or gross basis? You seem to be saying that you owe the money, and the only issue is the net vs. gross basis.
      Thank for your answer, seems like the send the check by mistake. I just got the check last Friday. I dont have it in front of me right now but It think it was issue on July 2012.
      Yes my only issue is that I don't want to pay the Gross (11k) since I only got a check for the net (7K). They need to figured out how to get their rest of their money back from the IRS.

      Comment


      • #4
        The employer getting the taxes back from IRS in 2012 for a payment issued in 2012 is very easy. They simply process a negative payroll entry in the same quarter through the payroll system and everything is automatic. A lot like processing a check cancel. If it crosses the quarter boundary it becomes harder. Not with IRS. As long as the annual boundary is not is not crossed, IRS is fine with the correction going onto a different quarter. Functionally one 941 quarterly reported is overstated while the later 941 quartely report is understated and the annual W2/W3/940 are just fine. If a quarterly bounary is crossed there is a good chance that your state quarterly report will need to be ammended, not fun, but also pretty routine. There is no issue of the employer "asking" IRS for taxes back, they just adjust the next deposit and related reports. This is really not a big deal as far as IRS is concerned (within the same year).

        HOWEVER, if any of the repayments occur next year, the rules change, big time. It then becomes IMPOSSIBLE for the employer to recover the taxes. Any time repayments cross the annual boundary, gross basis just become mandatory.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

        Comment


        • #5
          Did you cash the check? If not, I'd mark it void and sent it back certified mail. Recouping the taxes should be their problem.
          I am not an attorney, and don't play one on TV. Any information given is a description only and should be verified by your attorney.

          Comment


          • #6
            Originally posted by Alice Dodd View Post
            Did you cash the check? If not, I'd mark it void and sent it back certified mail. Recouping the taxes should be their problem.
            I did cash the check... I did not know it was sent by mistake...

            They are this big corporation and their payroll department don't really care if I send the money back or If keep it, why I don't get is the reason why they can't just can take the net amount and fix their own mess... They told me "Oh just send the 11k is the same.... we will adjust it after that"

            Comment


            • #7
              Call up the payroll department and ask to speak to the manager. The biger the company, the bigger the payroll department and I would not assume that some random clerk is speaking for the company as a whole. Be polite but say that IRS rules clearly call for net basis recovery for a current year repayment.

              With regards to "their payroll department don't really care if I send the money back or If keep it", that is nonsense. I have been in charge of four different payroll departments over the years, several of whom where large companies you have heard of, and if I had made such a foolish statement where anyone had heard it I would have fired on the spot. $11K is real money, even at big companies. I have never worked for a company where we would have at a minimum sent this out to collections if necessary and quite probably done a court action ourselves.

              ------

              Just to be clear, you were talking about a repayment schedule. They do not have to agree to that, and even if they do, any payments made 2013 or later must be done on a gross basis.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

              Comment


              • #8
                Originally posted by DAW View Post
                Call up the payroll department and ask to speak to the manager. The biger the company, the bigger the payroll department and I would not assume that some random clerk is speaking for the company as a whole. Be polite but say that IRS rules clearly call for net basis recovery for a current year repayment.

                With regards to "their payroll department don't really care if I send the money back or If keep it", that is nonsense. I have been in charge of four different payroll departments over the years, several of whom where large companies you have heard of, and if I had made such a foolish statement where anyone had heard it I would have fired on the spot. $11K is real money, even at big companies. I have never worked for a company where we would have at a minimum sent this out to collections if necessary and quite probably done a court action ourselves.

                ------

                Just to be clear, you were talking about a repayment schedule. They do not have to agree to that, and even if they do, any payments made 2013 or later must be done on a gross basis.
                Thank you again. I called today also, and they have created a second ticket for the escalation to an supervisor (the lady that I spoke with she did not get why they sent the check), but basicly the two reps (a rep and then a supervisor) from yesterday, they just said to pay the Gross amount and when I said that is not going to happen, they just said do what you need to do. they did not want to escalate to someone else.

                Hopefully everething will turn out fine, they should take the net money, the sooner the better.

                Comment


                • #9
                  I am probably mangling the quote, bu there is a famous quote something to the effect that one should never ascribe to malice something that can be explained by simple incompetence. Even big companies do not hve large number of employees or managers who actually understand fairly arcane labor law or tax code rules. I have had bosses (mine or someone else's) make these sort of "shoot from the hip" decisions in the past, and one of my jobs is to try to talk them off the ledge. Or if necessary, call Legal and have them do it. There is a really good chance that the decision maker here has authority but no actual expertise. And that IRS really does not care how self important the decison maker is.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

                  Comment


                  • #10
                    Originally posted by DAW View Post
                    I am probably mangling the quote, bu there is a famous quote something to the effect that one should never ascribe to malice something that can be explained by simple incompetence. Even big companies do not hve large number of employees or managers who actually understand fairly arcane labor law or tax code rules. I have had bosses (mine or someone else's) make these sort of "shoot from the hip" decisions in the past, and one of my jobs is to try to talk them off the ledge. Or if necessary, call Legal and have them do it. There is a really good chance that the decision maker here has authority but no actual expertise. And that IRS really does not care how self important the decison maker is.
                    One more question? I should be familiar with what portion of the Law labor & Tax
                    Thank you in advance

                    Comment


                    • #11
                      Any time you are talking about IRS, the related law is almost always the Internal Revenue Code (IRC). Often refered to as the tax code. The related regulations are called Treasury regulations. Plus IRS has "procedures", "revenue rulings" and vast numbers of other devices which are basically IRS's formal opinions. The IRC is written in such a way so that formal IRS opinion (mostly) has the force of law. And IRS has a very good track record in court. The fact they have their own courts (Tax Courts) where they are judge, jury and executioner does not hurt their record, but in fact they do very well historically in general courts. It takes very serious legal counsel to take IRS to court with any chance of wording and IRS has a long track record of actively defending whatever they think their rules are. There are many famous court decisions where large well known companies with presumably expensive legal teams took IRS to court and mostly got their heads handed to them. I have never worked for a company where not following IRS rules was considered to be a good idea.
                      "Reality is that which, when you stop believing in it, doesn't go away".
                      Philip K. **** (1928-1982)

                      Comment


                      • #12
                        Second part:

                        A lot worse than It was:

                        The supervisor was ok on getting the 7k for the check that they sent by error becase it was made 7/27/2012 no problems there.

                        The Root of the problem is that they are trying to collect 11K from comisions paid in 2010, they said that i got over paid 11K.

                        So instead of sending an letter to collect the money the send a check crazy, but now I have to pay the check 7K and they want to be refund for 11k. I was not aware of being overpaid. I guess I need a lawyer

                        Comment


                        • #13
                          Treat these as two unrelated issues. Which they are. Lets ignore the $11K since that has been anwered.
                          - You have an unrelated request for an alledged overpayment from 2010. Key word is "alledged". If I am reading you correctly, you have no feel for whether or not the employer is correct. I would ask for proof and do not take their word. If they were wrong before (not yet proved) they could still be wrong now.
                          - Even if they can prove the overpayment (not yet happened), it would then be worth looking to see if there are any statutory impediments to their claim. Example. Bob sells cars from an auto lot. Bob's employer feels Bob is commission only, that is what the agreement says and if Bob's employer later discovers that Bob was overpaid commissions (per the agreement), then they want they want the overpayment back. The problem is that the agreement does not override statutory law. Under FLSA given Bob's job duties and industry, the employer must pay minimum wage. All the agreements in the world cannot override this statutory law rule. So the agreement is only valid to the extent that MW is not violated. In Bob's case, there is a potential statutory impediment to their claim. Now you are not Bob, but if you find that you agree about the overpayment (not there yet), then your next step is to repost and see if there is a statutory impediment to the claim.
                          - Lastly is a reality check issue. I am not your employee but $1K is not a lot money ($11K was). I would not hire a lawyer to recovery $1K and take you to court. I might take you to small claims court, and I certainly would send it out to collections. I will not say that $1K is not collectible but I will say that the smaller the amount the harder to collect because there are fewer possible reasonable acttions. I do not know (or care) what FL statute of limintations on these sort of court actions are, but the older the debt the harder to collect. That is why I am saying that this is a VERY different issue then the first issue you raised.
                          "Reality is that which, when you stop believing in it, doesn't go away".
                          Philip K. **** (1928-1982)

                          Comment


                          • #14
                            Their Letter:

                            Ruben,

                            We received information about commissions that were overpaid to you in 2010 and 2011, in the amount of $11,782.09. The commission amounts are $8,822.80 paid to you in 2010, and $2,959.29 paid to you in 2011. This is the letter you received from @#$$% informing you of this overpayment. Since you received the money from these commissions in prior years, this overpayment will need to be paid back with this gross amount, $11,782.09. Once this overpayment has been repaid in full, we will issue you a W2C, which is a corrected W2 for 2010 and 2011, and this will adjust your social security and medicare taxes for those years. Payment arrangements can be made for this.

                            In the meantime, you were issued an additional check in error, 07/27/12, for this full amount. This created an additional overpayment.
                            Since this money was issued to you in the current year, 2012, you can repay the net pay amount, $7,156.37.
                            You can repay this net amount in a single personal check, cashier's check, or money order payable to **** Services, Inc.
                            Send the check to:
                            Last edited by ElleMD; 08-03-2012, 11:05 PM. Reason: removed name of company

                            Comment


                            • #15
                              Originally posted by DAW View Post
                              Treat these as two unrelated issues. Which they are. Lets ignore the $11K since that has been anwered.
                              - You have an unrelated request for an alledged overpayment from 2010. Key word is "alledged". If I am reading you correctly, you have no feel for whether or not the employer is correct. I would ask for proof and do not take their word. If they were wrong before (not yet proved) they could still be wrong now.
                              - Even if they can prove the overpayment (not yet happened), it would then be worth looking to see if there are any statutory impediments to their claim. Example. Bob sells cars from an auto lot. Bob's employer feels Bob is commission only, that is what the agreement says and if Bob's employer later discovers that Bob was overpaid commissions (per the agreement), then they want they want the overpayment back. The problem is that the agreement does not override statutory law. Under FLSA given Bob's job duties and industry, the employer must pay minimum wage. All the agreements in the world cannot override this statutory law rule. So the agreement is only valid to the extent that MW is not violated. In Bob's case, there is a potential statutory impediment to their claim. Now you are not Bob, but if you find that you agree about the overpayment (not there yet), then your next step is to repost and see if there is a statutory impediment to the claim.
                              - Lastly is a reality check issue. I am not your employee but $1K is not a lot money ($11K was). I would not hire a lawyer to recovery $1K and take you to court. I might take you to small claims court, and I certainly would send it out to collections. I will not say that $1K is not collectible but I will say that the smaller the amount the harder to collect because there are fewer possible reasonable acttions. I do not know (or care) what FL statute of limintations on these sort of court actions are, but the older the debt the harder to collect. That is why I am saying that this is a VERY different issue then the first issue you raised.
                              This is very good information I will definitely will go to through the steps, this took me by surprise, I don't have enough information right now to refute this claim, but they need to provide me with proof of the over payments.

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