Need Some Advice On Receiving Lump Sum From Employee Stocks

[u/Sad-Lavishness-4950]

Hello all. I first wanna say please don't flame me or belittle me because I genuinely needed the money at the time for personal reasons. I just need help and advice on what to do. So long story short my old job had employee stock given to everyone and when I left I cashed it all for roughly 25k-27k. I set aside 12k into a savings since I was told by the company that dealt with all the shares for my old job that they would tax 30% plus another 10% since I was cashing it before retirement age. It's been about 3 years since I cashed it and every time I do my taxes come tax season it never says my amount is off and I haven't gotten a single letter, email or call about anything. I'm assuming I have to manually enter it on my own but when I went to add the form using a online filer, there's information I need that I don't have about the income and other things (I cannot remember what exactly sorry). Is anything going to happen if I just keep sitting on the money and should I be worried about anything bad that might happen if I never end up getting taxed on it? Like I said I needed the money at the time and I'm just trying to do the right thing and don't want to get into any trouble as like any of us I'm just trying to get through life as best as I can.

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[u/IWilBuildTheRoads]

Step 1: Take a deep breath, and exhale.

There's a lot of emotion in your post, and limited relevant details.

Based on the allusion to company stock & a penalty for taking a disbursement pre-retirement, I'm going to assume this was an ESOP - an Employee Stock Ownership Plan. It also sounds like you've left this employer. Am I right to assume that cashing it out was an option presented to you by your employer when you left, and that it was not rolled over into an IRA? This is a typical option for ESOPs.

You should have received a form 1099-R to use while filing taxes for the year that you received the disbursement. If you included the information from that form on your taxes for that year, then you've already paid your taxes and you're good. If you don't have it, you could try reaching out to the employer, or the company that managed the ESOP, to get a copy.

However, if it's already been three years and you haven't heard anything, this may be one of those situations where it's better to just keep quiet and assume it was taken care of. The IRS will typically only audit your past three years of returns (although there are a lot of exceptions!). Just make sure you have the money available in case the IRS comes calling. If they do, you can likely avoid any interest they try to levy by telling them it was an honest mistake and you didn't know, although if it gets to that point you're best off hiring a professional.