Taxpayer is in 100% in Japan, working for a Hawaii company while in Japan, tax home is Japan, and providing services that are being "consumed" in Japan.
Employer gives him a W2 with Hawaii sourced wages on it.
They wont change it.
I told the client that even if we report his Hawaii income as zero (and ask for his WH back, lol), he will receive an adjustment letter.
Note: Hawaii does not allow the FEIE.
It is also my opinion (from experience) that unless he can get the employer to correct the W2, that there is no way Hawaii will consider letting him out of it (snowball's chance in heck) and they will seek collection on the adjustment.
He asks that I report it as zero and he's gonna try.
My question is, "Can I ethically report his income to Hawaii as zero (because of the facts and circumstances)? Or am I bound to follow the W2?