Responding to an IRS Request for Wage Verification

Quick overview

An IRS request for wage verification means the agency needs proof that the income reported on your tax return matches what employers, payers, or third parties reported to the IRS. The request commonly asks for W‑2s, 1099s, pay stubs, or wage-and-income transcripts (often obtained with Form 4506‑T) (IRS: About Form 4506‑T). Responding fully and on time prevents additional notices, holds on refunds, or possible penalties.

Why the IRS asks for wage verification

The IRS compares data filed by payers (employers, clients, financial institutions) to what taxpayers report. If the IRS finds mismatches—missing W‑2s or 1099s, different wage amounts, or math errors—it may send a correspondence letter requesting verification. Common triggers include:

• Reported income that doesn’t match third‑party filings.
• Amended returns filed after the original return.
• Claims for credits or deductions that hinge on earned income.
• Identity-theft flags or suspected mismatches in employer reporting.

In my practice, most wage‑verification notices are resolved by sending the exact documents the IRS lists in the notice, plus a short explanation letter if numbers don’t match.

What the notice usually asks for

Read the IRS letter carefully—each notice has a Letter number and a deadline. Common items requested:

• Copies of W‑2s for the tax year in question.
• Copies of 1099‑NEC, 1099‑MISC, 1099‑INT, etc.
• Pay stubs showing year‑to‑date wages.
• Correspondence about employer corrections (e.g., Form W‑2c).
• A signed statement explaining differences, with supporting documents.

If the notice references obtaining a transcript, Form 4506‑T is the common method to request wage and income transcripts from the IRS (see IRS: About Form 4506‑T).

Step‑by‑step response plan

Follow these clear steps to prepare a complete response:

1. Read the notice and note the deadline. The IRS typically gives a set number of days to respond—obey that date or request more time in writing.
2. Confirm the year, amounts, and the specific documents requested. Don’t guess—send what the notice asks for.
3. Gather documents:

• Employer copies of W‑2s or corrected W‑2c forms.
• 1099s and bank statements that support nonemployee income.
• Pay stubs showing year‑to‑date totals.
• Copies of previously filed tax returns and any amended returns (Form 1040‑X) if applicable.

1. If you don’t have employer forms, request duplicates from the employer payroll department. If the employer cannot supply them, use Form 4506‑T to request a wage and income transcript from the IRS.
2. Prepare a concise cover letter listing the documents enclosed and briefly explaining any discrepancies.
3. Make and keep copies of everything you send (digital and paper).
4. Send the response exactly as the notice instructs—mail address or, for specific cases, an IRS secure portal. Use certified mail or another trackable method when mailing.

In my work, a one‑page cover letter that lists enclosed items and provides a short explanation often speeds review.

Sample cover letter (short)

[Date]

Internal Revenue Service
[Address from the notice]

Re: Notice Number [X], Tax Year [YYYY]

Enclosed please find copies of W‑2 and 1099 forms and year‑to‑date pay stubs requested in your notice. The amounts reported on the enclosed W‑2s match the wages we reported on Form 1040 for tax year [YYYY]. If you need additional documentation, please contact me at [phone/email].

Sincerely,

[Taxpayer name, SSN last four digits]

When you don’t have all the requested documents

If you’re missing a W‑2 or 1099:

• Ask the employer or payer for a duplicate immediately. Most employers can reissue or provide an employee copy.
• Use Form 4506‑T to request a wage-and-income transcript from the IRS that lists what third parties reported for your Social Security number (IRS: About Form 4506‑T).
• If the payer no longer exists, reconstruct income with bank statements, invoices, deposit records, and a signed statement explaining efforts to obtain the missing form.

Keep proof of your attempts to get the missing records—document phone calls and store emails.

Common mistakes that slow resolution

• Sending incomplete sets of documents.
• Failing to reference the IRS notice number or tax year on your submission.
• Mailing documents to the wrong address.
• Not keeping copies and tracking proof of delivery.
• Assuming silence means everything is resolved—follow up if you don’t get confirmation.

A frequent avoidable error: sending only pay stubs when the IRS specifically asked for W‑2s or transcripts.

Timelines: how long before the IRS responds?

Processing times vary. Simple verifications are often resolved within several weeks; complex or amended issues can take months. If you used Form 4506‑T to obtain transcripts, allow extra time for transcript processing. Keep records of when you mailed the response and follow up with the IRS if you don’t hear back in the timeframe the notice or IRS guidance indicates.

When to get professional help

Consider a tax pro when:

• Multiple years or employers are involved.
• You suspect identity theft or fraud.
• The IRS claims large unreported income and you disagree.
• You’re unsure how to reconstruct missing income records.

A tax professional (CPA, EA, or tax attorney) can prepare a rebuttal packet, liaise with the IRS on your behalf, and file appeals if necessary. See our guide to preparing a rebuttal packet for IRS correspondence audits for more on building a response (Preparing a Rebuttal Packet for an IRS Correspondence Audit: https://finhelp.io/glossary/preparing-a-rebuttal-packet-for-an-irs-correspondence-audit/).

Recordkeeping recommendations

Best practice is to keep W‑2s, 1099s, and supporting records for at least seven years when you claim a loss or deduction that could be audited. For routine returns, the general rule is to keep records three years, but wage documentation is cheap insurance against disputes.

For guidance on lost W‑2s and how to correct previously filed returns when a W‑2 is missing, see our article on correcting a previously filed return because of a lost W‑2 (Correcting a Previously Filed Return Because of a Lost W‑2: https://finhelp.io/glossary/correcting-a-previously-filed-return-because-of-a-lost-w-2/).

If you want a primer on what a W‑2 reports and why it matters, read: Form W‑2: Wage and Tax Statement (https://finhelp.io/glossary/form-w-2-wage-and-tax-statement/).

Appeals and next steps if the IRS disagrees

If the IRS does not accept your documentation, you can:

• Ask for an explanation in writing and the procedure to appeal.
• File an administrative appeal with the IRS Office of Appeals.
• Request a conference with an IRS examiner or submit additional documentation.

Document every communication. If an amount is assessed and you disagree, you can still pay under protest and file for a refund or pursue appeals depending on the assessed tax type.

Real‑world example (anonymized)

A client received a wage‑verification letter because a part‑time employer reported wages later than the year the client filed. We obtained a duplicate W‑2 from payroll, included a cover letter explaining the timing mismatch, attached pay stubs showing year‑end totals, and sent everything by certified mail. The IRS accepted the explanation and adjusted its records—no penalty.

— In my 15 years advising clients, quick, well‑organized responses like this are the most frequent path to a clean resolution.

Final checklist before you send

• [ ] Did you include the notice number and tax year?
• [ ] Are all documents copies (not originals)?
• [ ] Did you keep a complete duplicate set and proof of mailing?
• [ ] Did you include a short, signed cover letter explaining any discrepancy?
• [ ] Did you send to the address on the IRS notice?

Professional disclaimer: This article is for educational purposes and does not replace personalized tax advice. For complex matters, contact a qualified tax professional. Author: CFP® with 15+ years of tax and compliance experience.

Authoritative sources:

• IRS, About Form 4506‑T, Request for Transcript of Tax Return: https://www.irs.gov/forms-pubs/about-form-4506-t
• IRS, Payroll Taxes and W‑2 timing guidance: https://www.irs.gov/businesses/small-businesses-self-employed/payroll-taxes

Internal resources:

• Form W‑2: Wage and Tax Statement: https://finhelp.io/glossary/form-w-2-wage-and-tax-statement/
• Correcting a Previously Filed Return Because of a Lost W‑2: https://finhelp.io/glossary/correcting-a-previously-filed-return-because-of-a-lost-w-2/
• Preparing a Rebuttal Packet for an IRS Correspondence Audit: https://finhelp.io/glossary/preparing-a-rebuttal-packet-for-an-irs-correspondence-audit/

If you’d like, I can draft a one‑page cover letter customized to your notice and a checklist for the documents you should send.