Form W-4 withholding

[dsi]

An employee wants to claim "exempt" from withholding on his W-4. The employer knows the employee does not meet the requirements to claim exempt, but the employee refuses to change his W-4. Doesn't the employer have to send a copy of the W-4 to the IRS?

[Black Bart]

Here's

An employee wants to claim "exempt" from withholding on his W-4. The employer knows the employee does not meet the requirements to claim exempt, but the employee refuses to change his W-4. Doesn't the employer have to send a copy of the W-4 to the IRS?

an IRS instruction that says withhold at single/zero, but it doesn't mention sending in the W-4. http://www.irs.gov/govt/tribes/artic...180596,00.html

I guess whether or not they send it in to give themselves some extra cover would depend:

1. Does the employer want/need to keep the person on? It would probably kill the job if IRS responded.
2. If push comes to shove with IRS, will employee "take the rap" and not try to drag the employer into it? (If it's any of my relatives, don't believe a word they say.) Exempt status is not that unusual and it's a long shot that anything would ever come of it in this era of diminished withholdings UNLESS...the guy's a professional deadbeat, IRS hits him with a huge bill, and he claims "I thought my employer was withholding correctly, they SHOULD have, and that "Exempt" form is a mistake. THEY advised me to do it like that, you should collect from THEM..., etc., etc., etc.".

I think I'd just go single-zero and let him/her like it or lump it (walk) if I could do without 'em.

[dsi]

Thanks for the response BB. The employee gave in and changed his withholding.

[dsi]

Why did he want to claim exempt you ask? He owes back child support and didn't want it to affect his year end refund.

[veritas]

nice to know

he has his priorities in order. The employee that is.

The feds don't require the w4 be sent in, But the state might.

[JohnH]

I'd tell him I'm going to ignore the W-4 and withhold at Single-Zero. If he won't support his kids, somebody's got to hold him accountable.

[JG EA]

Invalid W-4 -See Pub 15

A W-4 is not invalid unless it is filled out wrong.

It is not the employers job to ask if they are intitled to Exempt Status. If they had no tax liability the previous year, etc. that is not the emloyer's business.

There is no requirement to send to the IRS. If the IRS notifies the employer, then action is taken. There is a requirement to get a new W-4 in the new year when the previous year was exempt.

If the employee get more back in his paycheck this would not have a motive of reducing child support. The more he gets back the more will be taken away if based on a percentage. Child support is taken from the disposable net.

All that being said if the W-4 is wrong in some way (having M 5 and also exempt for instance) then the employer asks for a correct one. If the employer doesn't get one then he withholds at S-0.

[ChEAr$]

Two requirements

for a valid exempt W4: no tax liability last year AND expect no tax liability for this year. The employer has payroll records year to date at hand and can readily determine this, at least for a single wage earner with nothing exotic like K1s with
losses.

anyway, as DSI said, the employee gave in. Do you reckon he wanted to stay
employed in these days of precarious employment?

[Black Bart]

In theory it does,

...If the employee get more back in his paycheck this would not have a motive of reducing child support. The more he gets back the more will be taken away if based on a percentage. Child support is taken from the disposable net...

assuming they're on the up-and-up, do their parental duty, and play by the rules. As a practical matter it doesn't always work out like that in the real world.

I do four or five returns every year for filers (mostly men) who have not paid a cent during the year -- I don't know how or why; maybe the ex-wife doesn't pursue it or they can't be found. They frequently owe huge sums ($10/20/30K) which have been in arrears for years and file joint returns using an Injured Spouse form to shield new wife's withholding and EITC. If the debtor is self-employed (very common) or used an "Exempt" W-4, then no support at all will have been paid. His only "loss" is the confiscated share of EITC and even that's free -- courtesy of the U. S. Treasury which generously, if reluctantly, whittles away at deadbeats' liabilities year after year. As EITC grows by leaps and bounds, eventually the tables will be turned and taxpayers will owe them money.

It's a hell of a way to run a railroad.

[AuditorTurnedGood]

I know someone

who works for the county tracking down deadbeat parents. In MN they will throw the book at them if they can find them, which if they're in the state they usually can. Revoking driver's licenses, professional licenses, attaching every asset they can find. At the end of the day, if they guy owes back support, and a W2 is being filed with is SS number, chances are at some point (at least here) the county is just going to garnish the living daylights out of his paycheck.

I can, so some extent, understand not wanting to pay spousal maintainence, but child support? Seriously, they ARE your kids....

[JohnH]

I think MN has the right approach. More states should follow their lead and there should be cross-border cooperation on this issue.

[ChEAr$]

I think MN has the right approach. More states should follow their lead and there should be cross-border cooperation on this issue.

Hmmm, cross border cooperation. ah, I know! Let IRS do it. Put one more question
on the 1040: Do you owe back child support? Yes.. No.. N/A

[JohnH]

And there is where the rubber meets the road, as they say. I'd be as firmly against the Federal government getting involved in what should be a state issue as I am in favor of individual states donig it cooperatively. But then that train has pretty much left the station already, hasn't it?

[JG EA]

for a valid exempt W4: no tax liability last year AND expect no tax liability for this year. The employer has payroll records year to date at hand and can readily determine this, at least for a single wage earner with nothing exotic like K1s with
losses.

anyway, as DSI said, the employee gave in. Do you reckon he wanted to stay
employed in these days of precarious employment?

Again I say it is not the employer's business to determine this.

[ChEAr$]

Again I say it is not the employer's business to determine this.

But there is nothing to prevent employer from counseling employee to do the right thing. Sometimes an
employer actually need to take a paternal interest in his employees in order to maintain the integrity of
his workforce and thus maintain productivity over the long haul.