My client relied on a payroll processor to file their W2s. The payroll processor (local company) e-filed the W2s on 02/01/2021 for tax year 2020. Not sure what was sent to my client, but the payroll processor submitted duplicate W2s in August. The Social Security Administration processed the duplicate submission and now the wages don't tie to the 941s reported to the IRS.
Payroll processor received all notices and ignored them (they have been fired) and now the IRS is sending my client a large penalty for late filing. The IRS notices only says that the W2s were late filed in August and has no mention of them being filed 1 day late in February.
I want to know the best way to respond. Lawyer will be involved to sue the payroll processor for not filing on time but the company probably doesn't have much in the way of funds.
I called the SSA 4 different times and got 4 separate answers all over the spectrum. I was thinking of sending a response to the IRS showing the original e-filing submission on 02/01/2021 and again in August and explaining that the client relied on a payroll processor to handle all filings. Has anyone else seen anything similar to this and abated the penalties? The penalty is over 75K.