@Anonymous wrote:
Has anyone ever heard of this ? What damage can be done to your scores as a result ? ( WITHHOLDING COMPLIANCE PROGRAM ).
Score effects from the Withholding Compliance Program directly? None.
Score effects from the other actions frequently seen alongside those that lead to the WCP (IE: tax under-payment)? Tax liens and their fairly large negative effects.
If you've ended up getting the attention of the IRS due to mis-reporting your allowances on the W-4 due to following "tax protestor" advice... either follow the IRS guidance to correct your withholdings, or ask the group whose advice you took for legal assistance. (Detailed discussions of those tax topics here would probably not end up staying FSR.)
From the employers perspective:
We are required to obtain a W-4 from each employee.
Based on the number of allowances claimed by the employee, we adjust the payroll withholding for taxes exactly as the employee marked, including if they claimed not to require ANY withholding. (We used to have to report extreme cases - over 10 allowances or no withholding, but not anymore.)
Quarterly, we submit those taxes to the government, and at the end of the year, send a W-2 to the employee and a W-3 to the government (actually to the SSA, not the IRS...) summarizing income, withholdings, etc.
If the IRS then believes that the withholdings were too low (ie: the employee owes too much at tax-time), they'll send a 2800C directing us to cap ("lock-in") the maximum number of W-4 allowances the employee can claim. (This is the Withholding Compliance Program - it requires the employer to withhold the IRS-determined minimums from payroll checks.)
Yes, there is an appeals process. Yes, various "tax protestors" will tell you there is no legal authority for your employer to change your W-4 at the direction of the IRS... and to sue both if they do.
But look... if you force your employer into the middle of your fight with the IRS, how do you think that's likely to turn out? (Both in court, and for your further employment prospects?)
EQ8:850 TU8:850 EX8:850
EQ9:847 TU9:847 EX9:839
EQ5:797 TU4:807 EX2:813 - 2021-06-06
