IRS dictating what my withholdings should be?

Question

My employer received a letter from the IRS, telling my employer to change my withholding to zero, the letter stated that I am not entitled to claim the withholding I am claiming and the IRS is telling my employer to change it to zero - can the IRS do this and does my employer have to do what this letter said? Its not some “court order” just a letter. Can I fight this issue?

Answer 1

Yes, the IRS can do that. They only do that if they believe that you are incorrectly filing Form W-4 with your employer, either improperly claiming EXEMPT status or claiming too many withholding allowances and owing money at the end of the year.

Your employer is bound by law to comply with the IRS instructions on this.

If you believe it is incorrect you need to contact the IRS yourself and resolve the issue.

Answer 2

Direct from the IRS website.

If the IRS determines that an employee does not have enough withholding, we will notify you to increase the amount of withholding tax by issuing a “lock-in” letter that specifies the maximum number of withholding allowances permitted for the employee. You will also receive a copy for the employee that identifies the maximum number of withholding exemptions permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding exemptions. If the employee still works for you, you must furnish the employee copy to the employee. If the employee no longer works for you, you must send a written response to the IRS office designated in the lock-in letter indicating that the employee is no longer employed by you. The employee will be given a period of time before the lock-in rate is effective to submit for approval to the IRS a new Form W-4 and a statement supporting the claims made on the Form W-4 that would decrease federal income tax withholding. The employee must send the Form W-4 and statement directly to the IRS office designated on the lock-in letter. You must withhold tax in accordance with the lock-in letter as of the date specified in the lock-in letter, unless otherwise notified by the IRS. You will be required to take this action no sooner than 45 calendar days after the date of the lock-in letter. Once a lock-in rate is effective, an employer can not decrease withholding unless approved by the IRS.

Answer 3

To fight it, you should "submit for approval to the IRS a new Form W-4 and a statement supporting the claims made on the Form W-4 that would decrease federal income tax withholding. "

Answer 4

Yes they can do this, and yes your employer is required to follow their instructions. This normally happens when you illegally claimed way too many allowances. When you sign your W-4, you say under penalty of perjury that the info is correct as you know it - apparently yours wasn't. If you feel that your current claim is justified, talk to the IRS and you might be able to get the letter rescinded if you can show to their satisfaction that what you claimed is valid. But if you claimed extra to get less taken out than you owe, you're busted.

Answer 5

An intelligent, motivated and dedicated individual can eventually win almost ANY battle...except with the IRS!

Do as you are told or they will put you in jail, rest assured!

The IRS have more legal right to just "come into your home" than the police do. Never pick on the biggest dog in the yard...

Answer 6

Your question brings to mind several others, for example:
What law makes you liable for a direct, unapportioned tax on your wages and salary? Should a free people allow government to take over half of what they earn in taxes?

Challenge the conventional wisdom about the income tax laws and how they relate to the average American.

Don't be bullied by the IRS, don't let your employer hand over your money to them without a fight.

Don't take my word for it. Do some research on your own.

Step one—find out what whistle-blowers from inside the IRS have to say--
What is Taxed http://whatistaxed.com/IRSwhistleblowers.htm
Freedom Above Fortune http://www.freedomabovefortune.com/

Step two—find out WHY the IRS refuses to answer questions about the nature of the income tax
We The People Foundation http://www.givemeliberty.org/
The Income Tax Goes on Trial http://www.bostonteapartyii.org/index.html
Truth Attack http://www.truthattack.org/index.php

Step three—search for the law which makes the average American liable for an income tax on their wages and/or salary (hint-- it doesn’t exist)
The IRS http://www.irs.gov/index.html
The Internal Revenue Manual http://www.irs.gov/irm/
Search The United States Code http://uscode.house.gov/search/criteria.shtml