Rather astonishingly, the FY 2012 budget includes a proposal that would require W-2s to be reported on a quarterly basis, rather than annually. To go along with this, the Obama administration has requested $13.3 billion to fund the IRS in FY 2012. This is a $1.1 billion increase from FY 2010. Over the last few years, our government has passed laws which some see as an attempt to turn tax professionals from their traditional role of taxpayer advocate into IRS informant (for instance, disclosure requirements concerning uncertain tax positions). But don’t worry, CPAs still work for their clients rather than the government. Still, the IRS budget includes $17 million to increase oversight of tax return preparers. They are trying to keep the heat on the profession.
Since wage information is already collected quarterly (in the form of payroll tax returns), the only logical reason to require quarterly W-2s would be to…well, I can’t think of one. Perhaps the US is thinking that it would be best if your employer paid the IRS first, then deducted what it thought you should pay in tax, and finally remitted what ever paltry sum was left to you. After, of course, taking from your pay whatever you may owe on your credit card or mortgage. Because, afterall, we must keep the bankers happy with their bonuses while the rest of us continue to pay.