Have a Tax Question? Ask a Tax Expert
Typically a Lock-In-Letter is received by a taxpayer when the IRS feels that their withholding amount is inadequate. The IRS deals with matters such as this on a case-by-case basis. If it will create a hardship to you for your employer to withhold more, the IRS should take this into consideration. Not knowing your circumstances, I am unable to tell you for sure that the IRS will release the lock-in letter.
What you need to do
What happens if the IRS determines that I do not have adequate withholding?We can tell your employer to withhold federal income tax at an increased rate. We do this by issuing a “lock-in letter.” At that point, your employer must disregard any Form W-4 that decreases the amount of your withholding. You’ll receive a copy of the lock-in letter, and we’ll give you some time before the lock-in rate is effective to submit a new Form W-4. This form must include a statement that explains why you believe you’re entitled to a different withholding rate or number of withholding allowances. You should send your Form W-4 and supporting documents to the IRS address as shown on this webpage. Once we issue a lock-in letter, you won’t be able to decrease your withholding unless we approve it.
What if I don’t want to submit a Form W-4 to my employer?Your employer must withhold income tax from your wages as if you’re single with zero allowances.
How to get help
Let me know if I can be of further assistance to you regarding this matter.
Typically do you receive refunds or do you usually owe? If you usually owe, and/or currently have a tax liability, this is likely why the IRS sent the lock in letter. If you have a current tax liability, the chances of them releasing the lock-in might be slim. However, again, if you can prove that them doing this creates a hardship, they may work with you. I can't say for certain what their actions will be. Listed below is some information from the Internal Revenue Manual.
184.108.40.206 (11-01-2008)Withholding Compliance Program
Sorry that I am unable to provide you with a more favorable response.
The mission of the Withholding Compliance program (WHC) is to ensure taxpayers who have serious under-withholding problems are brought into compliance with federal income tax withholding requirements. The program uses Form W-2, Wage and Tax Statement, information to identify taxpayers with insufficient withholding.
The goal is to correct withholding to ensure that taxpayers have enough income tax withheld to meet their withholding tax obligations.
As mentioned previously, let them know that withholding at single and 0 will create a financial hardship for you. You will have to contact them and explain to them why withholding at single and 0 will create a hardship for you. I provided a telephone number in one of the previous responses. There are no magic words, simply explain to them that with a wife and 3 children, that will create a financial hardship for you.