Paying Back Gross on Sign On Bonus

Hey guys,

If you sign a contract which stipulates that you need to pay back the gross amount of the sign-on bonus if quitting within a certain period of time, how can you recover the with-holding taxes since you are paid the amount net with with-holding? I have read over IRS Publication 525 + Form 941X and spoken to accountants / employment lawyers, so I have an idea of what should happen.

From what I gather, if you quit the same year, you can pay back Net Amount and have employer file an amended form 941X. If you pay back later year, you pay back gross amount and try to recover with-holding on the next annual tax return. However, what's stopping the employer from simply demanding the gross amount and NEVER giving you an amended W-2 (basically not giving you documentation to recover the with-holding from IRS)? 

This is a very specific question that likely can only be answered another member who had to go through the process or a specialized tax accountant who has dealt with this situation.

Thanks

 

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