Note:

It may still be appropriate to leave the lock-in in effect unless the employee provides additional information to support a redetermination.

Penalties may be abated if there is a reasonable basis, which exists if:

The withholding rate is computed in accordance with the form instructions. See Treas. Reg. 31.6682-1(a).

The taxpayer justifies the withholding rate claimed on the W–4.

The taxpayer demonstrates that withholding computed at the adjusted or modified withholding status (filing status) and withholding rate is the same as or less than the withholding on the original W–4.