My wife called me today shook and upset about a phone call she had just taken...

18 months ago,My wife decided to switch jobs,Shortly after the switch she cashed out her 401k that she had accumulated with her previous employer,Her original employer were not happy that my wife had left and as such were not easy to deal with when we asked questions about the 401k and how much / what she would receive.

My wife received a check some time after and a statement to go with it,She banked the check.

Approx a month after receiving the first check,She received a second check for the sum of $2700,My wife called her old employer and was told that the second check was sent as they had miscalculated the original pay out figure!

The check had my wife's name and was noted as 401k payment.

Back to today...

My wife received a phone call from her ex employer's CPA,The CPA claimed that the second check was indeed a tax payment sent to her in error,The CPA basically then went on to imply my wife stole the check...


What legal obligation do we have to repay these $$'s - The original statement showed the disbursement amount less tax.

More so,What recourse do we have against the CPA,My wife has a PHD,Makes a 6 figure salary and has just been accused of theft!

Any help would be very much appreciated!

MB

It is a legal question, and not a tax related question so consult a legal adviser.

It's hard to follow your story, but if I understand it:

1. Your wife receives a check for her 401(k) early withdrawal. She banks it. Question - the company should have withheld 20% of the payout for federal taxes - did they?
2. She receives a 2nd check for $2,700 and cashes it. Just curious - is this amount equal to 20% of the first check? If so, that would be evidence that this was indeed the withholding and was mistakenly sent to her.
3. She should have received a 1099-R in January of the year following the withdrawal - did she? What amounts were shown for the withdrawal, and does it show any tax withheld?
4. Now the company says they made a mistake and want the 2nd check back - presumably they now realize that this was money owed the government, not your wife. I understand that the CPA was rude about it, but I don't understand why you think there's some action you need to take against him. I suggest that your wife get her records in order so that she can determine whether the 2nd check belongs to her or not. If it is not her money, she will have to repay it.