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Withholding Compliance Program. William Warner Senior Tax Analyst Wage and Investment Compliance. Withholding Compliance Program. Tax year 2004 program began in October 2005. Approximately 120,000 cases out of 230 million Forms W-2 filed. Contact Information.

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Withholding compliance program

Withholding ComplianceProgram

William Warner

Senior Tax Analyst

Wage and Investment Compliance


Withholding Compliance Program

  • Tax year 2004 program began in October 2005.

  • Approximately 120,000 cases out of 230 million Forms W-2 filed.


Contact Information

  • Program is centralized in Lowell, Mass.

    • Toll-free number for employees and employers is: 1-866-791-0289.

    • FAX number is: 1-978-474-1326.


Employer Responsibilities

  • Accept all VALID Forms W-4

  • Furnish copy of proposed lock-in letter to employee immediately upon receipt.

  • If no further guidance is received from the IRS, impose withholding at the status and allowances (single/zero) specified in the letter 60 days after the date on the original letter.


Employer Responsibilities

  • Maintain withholding at the IRS specified status and allowances until further notice.

  • “Penalty”: If employer fails to honor lock-in as required, the employer is liable for the amount of tax that should have been withheld.


Employer Responsibilities

  • When an employer receives a lock-in letter for a former employee, a signed note on the company letterhead stating that the employee is no longer employed by the business should be mailed or FAXED to the Lowell office.


Employer Concerns

  • Waiting 60 days after notification before locking in employee.

  • System changes to prevent locked in employee from increasing allowances on-line.

  • “Suspicious” Forms W-4


How can you help your employees?

  • Remind your employees –

    The notice they received tells them to contact IRS, if they want to change the withholding status & allowances from single/zero.

    The employee needs to have the following information available when they call or write:


Joint filers must have the same information available for both spouses

  • Form W-4 and worksheets.

  • Most current pay stub for each job.

  • Number of allowances claimed on current Forms W-4.

  • The social security numbers and dates of birth for any children and proof of any deductions they want to use to claim additional withholding allowances.


Withholding Compliance Program both spouses

Look at www.irs.gov for:

  • Temporary regulations – TD 9196

    Internal Revenue Bulletin 2005-19.

  • Withholding Compliance Questions and Answers.