Employers report wages paid to each worker on a quarterly basis to the state UI agencies (but not to the federal government). This is indeed one source of information that could be helpful and it has been suggested as an alternative.

The drawbacks include:

* Definitional differences – Employers report quarterly wages subject to state UI coverage. The IRS needs to know wages subject to Federal Income tax. There are significant differences.

* Timing – The states do forward the quarterly reports of wages paid to the federal government, but with a substantial delay, so again, the IRS would not have access to more than the first two or three quarters of wage data until after income tax season, when they need it most.

* No Withholding data – The IRS needs to know the Federal Income tax amount withheld from each worker, which is not reported today other than through the annual W-2s. People overstating the amount withheld is a greater risk than people making false claims as to their wage amounts.

Hope this helps.
Kerry