wage repayment

My employer overpaid my gross wages in year 2000 by $2200. They are now reducing my 2001 wages on a weekly basis in order to collect the overpayment back. My interpretation of irs publication 15 circular e regarding wage repayment stating that an employer cannot offset the repayment during the current year when the overpayment occurred in a prior year should apply here. Am i correct on this ? If so, would'nt my employer be committing tax fraud ?

[crager34]

Happened to me as well. I look forward to the reply.

regarding irs pub. 15 cir. e, my understanding of this publication is for employers 1/4 annual tax reports to the irs. the employer is obligated to file form 843 to report the prior year overpayment when the repayment occured during the current year. the employer then has to file a w2c and w3c to the irs with a copy to the employee. a deduction or credit is then due to the employee for social security and medicare taxes paid on the overpayment. if the employer fails to do so, a possible tax fraud might be detectable. this is strictly my interpretation of the tax law. i'm waiting for a professional opinion myself.