Don't Mess With Taxes

H&H Bagels, bakers of what Zagat once called iconic bagels, now has a new, and unwelcome, claim to fame (or infamy).

New York City alleges that the bagel company's owner, Helmer Toro, is a tax cheat.

Manhattan District Attorney Robert Morgenthau has charged Toro with pocketing more than $369,000 in income and other taxes that were withheld from employees' paychecks. Toro also allegedly set up shell companies to game the unemployment insurance tax system out of another $33,000.

Toro pled not guilty to the charges and was released from custody. If convicted, he could face up to 15 years in prison and hundreds of thousands of dollars in fines.

I doubt this latest bit of unwanted recognition will go up on the company's Web page that boasts:

H&H Bagels has been featured on numerous television shows and movies. Most recently H&H appeared on NBC's 'Seinfeld' and on the feature film You ve got Mail starring Tom Hanks and Meg Ryan. Other television shows that have featured H&H include NBC 'Friends', Saturday Night Live, and L.A. Law, CNN, Good Morning America, ABC Wide World of Sports, USA Network US Open and many, many more.

What about H&H employees? In cases where taxes are withheld but not paid by the employer who's been collecting them, the workers don't have to worry.

The money has come out of their checks, so technically they have paid them. When it comes time to file returns, these workers should go ahead and count those withheld amounts as taxes paid.

In many such cases, however, employers who don't remit their workers' payroll taxes also don't send their employees correct, or any, W-2 forms. Heck, if the company's not going to worry about sending money to the IRS or the state revenue department, why would they mess with sending out tax statements to mere workers?

If you don't get a W-2 you can create a substitute document to submit with your federal return by filling out Form 4852. Check with your state revenue department for its acceptable replacement W-2 filing material. State tax offices usually will accept the federal replacement document.

Form 4852 is just one page, with an attached page of instructions that walk you through the W-2 re-creation process. Use your final pay stub to determine your withholding amounts.

Then submit the form with your tax return.

One word of warning, though. Filing a Form 4852 instead of an original W-2 may delay your refund while the IRS verifies the information you provided.

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