I've been helping a friend put together her taxes. Going through her W-2, she noticed that at a restaurant she worked at, the employer has vastly underreported her wages and tips, apparently including in the amount only her base pay and her tips from credit cards.
By the time she left the restaurant, she was getting suspicious that the employer wasn't handling the tips properly; all tips were reported directly to him every night as a pool, and then every 2 weeks he would personally distribute the money as part of wage disbursement.
What should she do? If she submits the W-2 as is, and she's audited, she's worried that she would be liable for the tips that she reported to the employer but were never heard from again.