Lock In Letter from IRS received?

Question

I received a lock in letter stating that i'm to be locked in for "single zero allowances". Now I'm married and also had a child this year. I'm not sure what prompted the IRS to tell my employer this but I let my CPA know and he says that I should just wait it out since there's not much paychecks left this year. I'll take a hit for the first couple months next year but then when I get my tax return - where we will file "married and an exemption for a child" and receive our refund, I will go to our payroll and show them. Then I can request to file a new W-4 because as my CPA states legally we can change our W-4 at any time. Does this sound correct to you?

Answer 1

Irs Lock In Letter

Answer 2

Did you really say CPA? Why would you use someone who is focused on businesses when you are an employee? An enrolled agent would usually be cheaper AND has a tax focus. The CPA exam only requires one to have taken one tax class. If he told you that you can change your W-4 at any time even though you had a lock in letter, what else has not bothered to research?



See IRS publication 505, page 11 for the steps to take when you believe you can support the information on a new W-4. You do NOT give it to your employer--you send it to the IRS. If the IRS agrees with you, they will send a letter to the employer.

Answer 3

The IRS typically issues a Lock Letter when you have had too little tax withheld, exceed the $1,000 safe harbor limit on underpayment penalties, and don't pay in full by the filing deadline. In most cases it's not done if you only foul up once but do so in multiple years.



The Lock Letter trumps your right to file an updated W-4 since your employer must comply with it until the IRS cancels it or modifies it. The only way to circumvent it is to change employers.



The IRS decides when the Lock Letter will be cancelled or modified. Once you have filed the joint return for 2013 showing a refund due they *might* entertain a request to release it or at least modify it. You'll have to ask sometime after tax season next year. In most cases a Lock Letter will stand for 3 or 4 years. If you are on a payment plan for unpaid taxes, the Lock Letter will stand at least until you have paid the debt in full.

Answer 4

And the IRS will also have the final say about this matter during the 2014 tax year for this purpose and time in your life.

After I lock in withholding on an employee, what do I do if I receive a revised Form W-4 from the employee?

You must disregard any Form W-4 that decreases the amount of withholding. The employee must submit for IRS approval any new Form W-4 and a statement that supports his or her request to decrease federal income tax withholding. The employee should send the Form W-4 and statement to the address on the lock-in letter. We’ll notify you if we approve the employee’s request. However, if the employee submits a Form W-4 that claims fewer withholding allowances than the maximum number specified in the lock-in letter, you must increase withholding based on that Form W-4.



http://www.irs.gov/Individuals/Employees/Understanding-your-2800C-Letter



Hope that you find the above enclosed information useful. 12/05/2013

Answer 5

a lock in letter is generally as a result of you continuing to ignore the requirements of withholding and probably always owe when you file, in addition that you possibly delay payment

your CPA should have warned you about the consequences of your negligence and it has now happened

you can resubmit your W-4 any time you like but if your employer has been notified by IRS to withhold at the single rate, he has no other choice than to comply with their order

Answer 6

Lock in means you are locked in. Employer can't change it, no matter how you file your return, until the IRS unlocks. PERIOD.



Legally you can change your W4 at any time....unless the IRS locks you in. You need to call IRS and find out why you were locked in. They wouldn't do it without numerous letters first.

Answer 7

Most of us can change our W-4 at any time. Most of us attempt to get it right the first time. You should have correspondence from IRS telling you why the lockin letter was sent and if you can convince them to allow a change to Married with 3 you can get that but don't count on more.

Answer 8

If you actually pay tax, you do not have the option to put exempt on the W-4 and periodically write checks to the IRS as estimated tax payments. You also can't pick 99 withholding allowances to see what happens.

Answer 9

If you don't trust your CPA and his advice, then go find a new one.



As for deductions, the way its listed will take more from your check, but you will still owe some at the end of the year. What difference does it make - the IRS is going to take their cut regardless of your marriage, children and how many deductions you claim

Answer 10

Sounds like you have a history of playing games with your taxes and you pissed off the IRS. Those letters are very very rare.

Answer 11

thats an interesting question and I hope you will get some reasonable answers