Get Announcement 2002-69 - Loss Limitation Rules; Correction. This Document Contains Corrections To

Q14: How can you be released from the Withholding Compliance Program? A14: You must continue to file returns and pay your taxes due. If you timely meet all your filing and payment obligations for three consecutive years, you can request that we release you from the Withholding Compliance Program.

If the IRS determines that an employee does not have enough federal income tax withheld, what will you ask an employer to do? If we determine an employee does not have enough withholding, we'll send you a lock-in letter stating the maximum number of withholding allowances permitted for the employee.

Employees who continue to file their returns and pay due taxes for three consecutive years may request to be released from the lock-in. The IRS will issue a 2813C letter to the employer notifying you that the employee is released from the lock-in. After this, the employee can submit a new Form W-4.

You have 60 calendar days after the letter's date to start withholding at the specified rate. This gives the employee time to communicate with the IRS, as is explained in their copy of the letter. The IRS holds employees responsible for accurately reporting their withholding status to their employer.

The Withholding Compliance Program analyzes wages and tax information on past W-2s to determine if individual taxpayers have had their taxes correctly withheld. The goal of the program is to ensure employees are meeting their income tax obligations.

This revenue procedure provides the exclusive procedures for a partnership (as defined in section 5.02 of this revenue procedure), S corporation, electing S corporation Page 4 4 (as defined in section 5.03 of this revenue procedure), personal service corporation (PSC) (as defined in section 5.04 of this revenue ...