In the past, the IRS has required employers to send in copies of questionable W-4s (Employee’s Withholding Allowance Certificate) received from their employees. They recently issued final regulations streamlining the requirement.
(1) Employers are no longer routinely required to submit a copy of any Form W-4 on which an employee claimed more than 10 withholding exemptions.
(2) In addition, they are no longer routinely required to submit a copy of any Form W-4 on which an employee claimed complete exemption from withholding for the tax year.
(3) Finally, the employer is only required to submit copies of Form W-4 only if instructed to do so in published guidance (there is none to date) or in a written notice to the employer from the IRS.