Caution:

If the taxpayer states they used the Tax Withholding Estimator on IRS.GOV, advise them that it calculates withholding to "catch up" the taxpayer’s withholding, depending on time of year of input and previous withholding up to that point.

Modifications must always occur so the taxpayer can be changed from the higher checkbox withholding to the more accurate standard rate (with adjustments). All jobs must be modified from the Step 2 checkbox withholding (higher withholding rate) to the standard withholding rate unless taxpayer is presenting a frivolous tax argument, IRM 5.19.11.10.5, Frivolous Communications.

For jobs where the WHC Withholding Estimator shows zero (0) annual withholding, a modification must be done in the event the wages of the taxpayer increase, the standard withholding rate will increase proportionately.

Verbal or written consent (Letter 2805C) is necessary to lock-in the taxpayer’s spouse (x-ref spouse).

Either the taxpayer or spouse may provide the information necessary to calculate the withholding arrangement once the x-ref spouse has given consent. Under IRC 6103(h)(4) you may make disclosures regarding withholding rate of a spouse to the other spouse.

The Letter 2805C instructs the taxpayer to provide what percentage of withholding arrangement they want applied to each spouse. The withholding arrangement can be 100% of the withholding adjustment applied to either spouse or 50/50 percentage split, proportionate to wages, between the taxpayer and their spouse.

If consent is given by the x-ref spouse, the WHC Withholding Estimator will calculate the withholding for all jobs and provide the annual credit or additional withholding per pay period for each job proportionate to wages. When there is a significant difference in wages, the WHC Withholding Estimator will apply all of the withholding adjustments to the highest paying job, to provide a more accurate withholding arrangement. However, the taxpayers may elect to split the withholding adjustment 50/50, proportionate to wages or have 100% applied to one spouse or the other. Withholding usually will be most accurate when all of the additional amount to be withheld is applied to the Form W-4 for the highest paying job.

If no verbal or written consent is received from the x-ref spouse, advise the taxpayer that until the x-ref spouse provides the required consent, the taxpayer’s lock-in will be modified to Married-Standard Rate with all withholding adjustments applied to their wage income.