IRS Dictates Employee Withholding Amounts

The IRS gives no guidance to employees on exactly what will cause the IRS to modify a lock-in letter. Neither does it tell the employee what kind of time frame to expect a change from the IRS after a request and documentation are submitted.

The "Transferred W-4 and lock-in letter from a predecessor" phrase does not appear anywhere else in a search of the IRS internet site. Therefor no employer has any idea of what it actually means. If you acquire a company or merge with another company are you responsible to know the status of every employee back to date of hire in reference to a lock-in letter?

Finally the IRS nowhere tells the employer how, when or why it will modify a lock-in letter. Nor does it discuss what the responsibilities the employer has when and if the IRS does modify it. The IRS really leaves the employer in the dark on changes.

Employers need to be aware of the above changes in the law and make the necessary adjustments to their systems to prevent oversights from happening. The initial letter to the employer is fairly straight forward but the unlimited time frame and enormous potential penalties make it imperative that every employer upgrade or install a system to track this information perfectly.