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Social Security Mailbox

Is Your Employer Paying FICA Taxes?

The IRS prosecutes companies that hang on to taxes withheld from your paycheck

En español | Q. I suspect that my employer hasn't been sending the IRS the Social Security taxes that are deducted from my paycheck. What can I do about that?

See also: How far in advance should I apply for benefits?

A. You can report the situation to the IRS. The tax agency actively investigates and prosecutes employers who fail to pay employment taxes — Social Security and Medicare taxes, along with federal income tax withholdings and unemployment taxes. It's a serious offense: In the past year, 79 people were incarcerated for an average of 24 months for employment tax evasion.

Here's what you can do to get the ball rolling on your case. Go to this IRS Web page and type in "3949A." This will give you a copy of a complaint form called "Information Referral." Mail the completed form to the Internal Revenue Service, Fresno, CA 93888.

The IRS says you can also just write a letter and mail it to the same address. Provide as much of the following information as you can:

  • Name and address of the person or company you're reporting
  • The employer's taxpayer identification number (Social Security number for an individual or employer identification number for a business)
  • A brief description of the alleged violation, including how you became aware of it, with the years involved
  • The estimated dollar amount of any unreported income
  • Your name, address and daytime telephone number

When making a complaint you're not required to identify yourself, but it would be helpful to the IRS if you do. Or, if you wish, your identity can be kept confidential.

One piece of good news: Even if your employer didn't pay the taxes, your time at the company will still go on to your Social Security work record. The benefit that you eventually receive down the road based on that record will not be affected by your having had the bad luck of working for a crooked employer.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question for the Social Security Mailbox? Check out the archive. If you don't find your answer there, send a query.

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