Rev. Rul. 80-68

ISSUE

What is an employer's obligation if an employee indicates that the name, address, social security number, or the number of exemptions shown on his or her Form W-4, Employee's Withholding Allowance Certificate, is false where such indication is not on the Form W-4 itself?

LAW AND ANALYSIS

Section 3402(f)(2)(A) of the Code provides that on or before the date of commencement of employment with an employer, the employee shall furnish the employer with a signed withholding exemption certificate relating to the number of withholding exemptions which the employee claims, which shall in no event exceed the number to which the employee is entitled.

Section 31.3402(f)(2)-1(e) of the Employment Tax Regulations provides that a withholding exemption certificate is invalid if the employee clearly indicates it to be false by an oral statement or a written statement (other than one made on the certificate itself) made to the employer on or before the date on which the employee furnishes the certificate. It also provides that, if the employer receives an invalid certificate and the employee does not subsequently submit a valid certificate, the employer must withhold from the employee as from a single person claiming no exemptions for withholding purposes.

HOLDING

If on or before the date on which an employee furnishes a Form W-4 to his or her employer, the employee indicates to the employer, other than on the Form W-4 itself, that the name, address, social security number, or the number of exemptions shown on the Form W-4 is false, the Form W-4 is invalid. Therefore, the employer must request another Form W-4 from the employee, and if the employee fails to provide a valid Form W-4, the employer must withhold from the employee as from a single person claiming no exemptions.