Did you receive a Lock in Letter?

What is a Lock in Letter or 2802C Letter? 

You are a w2 employee and you have filled out a w4 form. Telling the employer how much federal tax you want withheld commonly known as allowances.

In some cases people do not have enough federal taxes withheld from their paycheck. This can lead to potentially owing in taxes at the end of the year. If this is you, the IRS can issue a lock in letter asking your employer to adjust the taxes to the correct withholding/allowances. (single with 0 allowances). 

What should you do if you receive such a letter? Fill out a new w4 form before the IRS forces your employer to correct the withholding for you. You may write a letter to the IRS explaining why you are having less federal taxes withheld and why you should be allowed to have the extra exemptions. In some cases the IRS may approve you to have higher exemptions for a period of time. If you are struggling financially and to make ends meet you may be having less federal taxes taken out. Single parents may be a good candidate to ask for this. 

If you choose to ignore the letter and do not respond in the time specified 60 days, then the IRS will ask the employer to correct the withholding. Once this is done you cannot change it back. You will have to ask the IRS for permission to change the withholding. Which is something you do not want to deal with. 

Keep in mind the W4 form has been revised so you can no longer adjust the allowances. If the employer has not requested for you to revise the w4, you should submit a new one.

DON'T ignore any tax problems as it can have a serious impact on your household finances. States especially are fast to move to garnish wages and suspend driver privileges to those who owe back state taxes.

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