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How Do I Get an IRS Lock-In Letter Removed?

Employees can remove a lock-in letter by contacting the IRS. Employers must follow the lock-in letter until notified otherwise by the IRS.

Instructions for Employers to Remove an IRS Lock in Letter

When you receive IRS Letter 2800C, commonly known as a lock-in letter, you must adjust or “lock in” your employee’s tax withholding as stated on the letter. Typically, you begin withholding income tax as if the employee is single with no dependents (zero allowances) within 60 days of receiving the letter.

You are not allowed to honor any requests from the employee to change his or her federal income tax withheld. If you have an employee portal where employees can change their withholding, you must block that employee from changing his or her withholding.

You must continue to follow the lock-in letter until you receive notice from the IRS. This will usually be Letter 2808C.

How does the IRS know when to send in a lock-in letter?

The IRS compares each employee’s W-2(s) against the taxes they owe. If an employee owes too much due to insufficient income tax withholding, the IRS will send a lock-in letter instructing the employer to withhold more.

Common reasons an employee may not have enough federal income tax withheld include:

  • Selecting an incorrect number of withholding allowances
  • Wrongly claiming exempt status
  • Not accounting for having more than one job
  • Not submit a new Form W-4 after life changes
  • Not reporting that his or her spouse works on the Two Earners Multiple Jobs Worksheet

Will the employer get fined?

In most cases, employers aren’t responsible for an employee providing an incorrect W-4. The employer would usually only get in trouble for not following a lock-in letter.

However, if you fail to withhold federal income tax due to your own negligence or don’t take reasonable steps to ensure an employee’s withholding compliance, you could get fined.

Instructions for Employees to Remove an IRS Lock in Letter

When the IRS sends your employer a lock-in letter, you’ll get IRS Letter 2801C. Letter 2801C explains that the IRS believes your withholding has been wrong and what withholding the IRS is instructing your employer to use.

It’s called a lock-in letter because your employer has to lock in your withholding and can’t allow you to change it.

You have 30 days to appeal Letter 2801C. Follow the instructions on your notice to call the IRS or send a written explanation letter.

After the appeal period passes, you generally can’t stop the lock-in. If your withholding status changes, such as your number of dependents, you can call the IRS to request an adjustment.

If the IRS agrees to change your withholding, it will send a letter to your employer. Your employer can’t change your withholding until receiving the IRS letter.

How long does an IRS lock in letter last?

Lock-in letters usually last for at least three years from the date of the letter. After three years have passed, you can contact the IRS to remove the lock-in letter.

If the IRS agrees to remove your lock-in letter, they will send a letter to your employer. Your employer can’t change your withholding before receiving the letter.

When will the IRS remove or change your lock-in letter?

The IRS will generally only remove or change your lock-in letter if you can show why the withholding status they chose is incorrect.

You may need information such as your Form W-4 and worksheets, recent pay stubs, last tax return, and Social Security Numbers and birthdays for your dependents.

What is the IRS lock-in letter removal phone number?

The IRS lock-in letter removal phone number is 855-839-2235.