The current budget deficit is forcing Congress to take action to accelerate collections of Tax revenues from whatever sources possible. Thus, it comes as no surprise that the IRS, under increasing pressure by Congress, plans to accelerate tax revenue collections. Accordingly, the IRS has instituted a
withholding compliance program.
This program will enable the IRS to make an effective use of information reported on W-2 wage statements, and thereby "ensure that employees have enough federal income tax withheld from their paychecks".
This means that Individual Taxpayers claiming excessive allowances on their W-4 Form would be eventually penalized if it is determined at a tax filing time, that the excessive allowances claimed was an attempt to under withheld federal income tax withholdings.
For a further discussion on this topic, please visit the following link below:
Withholding Compliance Questions & Answers
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