Legal Question in Business Law in California

Re: Have not received w-2's

This is a question that could easily be addressed to and answered by the IRS, and I would suggest you have your sister do just that.

The IRS will probably tell her that when she files her return she should simply report the income and tax withheld based on her paycheck stubs and attach an explanation as to why there is no W-2 (i.e., employer failed to provide one).

This happens all the time.

Let's just hope the employer is actually depositing the withheld taxes with the IRS and Social Security. Some times failure to produce and furnish W-2s is the tip of an iceberg that includes the employer being in deep financial trouble and living off withholding tax money that was deducted from pay and held "in trust" for the taxing authorities. If so, your sister's Social Security, etc. account would not reflect all the contributions for which she should be credited.