IRS Form 4669 Guide: Statement of Payments Received Rules

1. Introduction – What is Form 4669?

IRS Form 4669, officially titled “Statement of Payments Received,” is an official federal tax statement. It is governed and administered by the Internal Revenue Service (IRS) under Section 3402(d) of the Internal Revenue Code.

This form is signed by a worker (employee or independent contractor) to formally certify that they included specific payments received from an employer in their gross income on their individual federal tax return and paid the applicable federal income tax due on those earnings.

2. Purpose of the Form – Why Does This Form Exist?

When an employer fails to withhold federal income tax from a worker’s wages—often due to worker misclassification or payroll errors—the IRS can audit the employer and assess substantial back withholding taxes.

However, under Internal Revenue Code Section 3402(d), if the worker independently reported those earnings on their Form 1040 and paid the income tax owed, the IRS cannot collect the tax twice. Form 4669 solves this double-taxation problem by providing written verification from the worker, allowing the employer to request relief from paying the income tax withholding portion of an IRS audit assessment.

3. Who Needs to File This Form – Eligibility Criteria

Form 4669 involves two parties: the worker who signs it and the employer who submits it to the IRS:

• The Worker / Payee: Completes and signs Form 4669 at the request of an employer to confirm that specific payments were reported on their personal Form 1040 tax return and taxes were paid.
• The Employer / Payer: Collects signed Form 4669 statements from workers and submits them to the IRS during an employment tax audit or worker reclassification assessment to reduce withholding tax liabilities.

4. Who Is Exempt / Not Required to File

Form 4669 is not used in standard, routine payroll operations. You do not need to file Form 4669 under the following circumstances:

• Standard W-2 employment relationships where federal income tax was properly withheld from every paycheck.
• Workers who did not file a federal income tax return for the tax year in question.
• Workers who filed a tax return but failed to include the specific payments received from the employer in their reported gross income.
• Workers who reported the income but failed to pay their federal income tax liability.

5. When to File – Deadlines and Frequency

Form 4669 is an event-based form rather than a routine annual tax return. It is typically completed during an IRS employment tax audit, a worker reclassification examination, or a voluntary payroll tax correction process.

There is no fixed annual deadline for Form 4669. However, employers must collect and submit signed Form 4669 statements within the timeframe specified by the IRS auditor handling the employment tax examination.

6. Where and How to File

The filing workflow for Form 4669 involves a two-step transfer between worker, employer, and the IRS:

1. The worker signs paper Form 4669 and returns the completed document to the employer.
2. The employer compiles all signed Form 4669 statements, attaches them to IRS Form 4670 (“Request for Relief From Payment of Income Tax Withholding”), and submits the package to the IRS examiner or IRS address as per instructions.

Form 4669 should not be mailed directly to the IRS by the worker. It must go to the employer first so it can be combined with the employer’s official relief request.

7. Step-by-Step Instructions to Fill the Form

Form 4669 requires simple identification details and tax filing affirmations. The table below outlines the primary fields on the form:

Form Section	Field Description	Filing Instructions
Payee Information	Worker Name & SSN	Enter the worker’s full legal name, Social Security Number (SSN) or ITIN, and current mailing address.
Payer Information	Employer Name & EIN	Enter the employer’s legal business name, Employer Identification Number (EIN), and business address.
Payment Details	Tax Year & Total Payments	State the calendar year during which payments were received and the exact total dollar amount paid.
Tax Return Affirmation	Form 1040 Details	Check the box confirming that the income was reported on Form 1040, specify the IRS Service Center where filed, and confirm tax payment.
Signature	Payee Certification	The worker must sign and date the statement under penalties of perjury.

8. Required Documents/Information Needed Before Filling

Before filling out Form 4669, gather the following tax records:

• The worker’s full legal name, Social Security Number, and current address.
• The employer’s business name and Employer Identification Number (EIN).
• Accounting records showing the exact total dollar amount paid to the worker during the calendar year.
• The worker’s personal tax records confirming that Form 1040 was filed for that tax year.

9. Common Mistakes to Avoid

Errors on Form 4669 can cause the IRS to deny an employer’s withholding tax relief request. Watch out for these common errors:

• Submitting without Form 4670: Submitting Form 4669 statements to the IRS without attaching them to Form 4670 (Request for Relief From Payment of Income Tax Withholding).
• Unsigned statements: Submitting forms that lack the worker’s original wet signature or date.
• Payment amount mismatches: Reporting dollar amounts on Form 4669 that do not match employer 1099 or payroll records.
• Workers who didn’t pay tax: Collecting Form 4669 from workers who reported the income but had unpaid tax balances or tax delinquencies for that year.

10. Penalties for Non-Filing or Errors

If an employer cannot obtain signed Form 4669 statements from workers during an audit, the IRS will hold the employer fully liable for paying 100% of the unpaid federal income tax withholding amounts.

Additionally, while Form 4669 relieves the employer from paying the income tax withholding portion under Section 3402(d), it does not relieve the employer from interest or penalties for failure to withhold or failure to file payroll tax returns. Intentionally submitting false Form 4669 declarations under penalty of perjury carries severe federal criminal penalties.

11. Related Forms or Schedules

Form 4669 works directly alongside several payroll and employment tax forms, including:

• Form 4670 – Request for Relief From Payment of Income Tax Withholding
• Form 941 – Employer’s QUARTERLY Federal Tax Return
• Form SS-8 – Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
• Form 1099-NEC – Nonemployee Compensation
• Form W-2 – Wage and Tax Statement

12. Frequently Asked Questions (FAQs)

What is IRS Form 4669 used for?

Form 4669 is used by an employer during an IRS audit to prove that a worker reported unwithheld payments on their personal tax return and paid the income tax due, relieving the employer from paying the income tax withholding assessment.

Does Form 4669 relieve an employer of Social Security and Medicare taxes?

No. Form 4669 only provides relief for federal income tax withholding under Section 3402(d). It does not relieve the employer of liability for unpaid FICA (Social Security and Medicare) or FUTA (unemployment) taxes.

Is a worker legally required to sign Form 4669 for an employer?

No. Workers are not legally obligated to sign Form 4669. However, many workers sign voluntarily to assist their former or current employer in clearing up payroll audit adjustments.

Does signing Form 4669 increase a worker’s personal tax bill?

No. Signing Form 4669 simply confirms what the worker has already done—reported the income and paid taxes on their Form 1040. It does not create new tax liabilities for the worker.

What form must an employer submit along with Form 4669?

An employer must aggregate all signed Form 4669 statements and submit them attached to IRS Form 4670 (Request for Relief From Payment of Income Tax Withholding).

Can Form 4669 be used if the worker did not pay their income tax?

No. Section 3402(d) relief only applies if the worker actually reported the income and paid the federal income tax due for that year.

13. Conclusion – Key Takeaways

IRS Form 4669 is a crucial relief document for employers facing employment tax audits or worker classification adjustments. By securing written confirmation that workers paid federal income taxes on their earnings, employers can obtain relief under Section 3402(d) and avoid double-paying withholding taxes.

To successfully obtain withholding relief, employers must collect accurate Form 4669 statements signed by workers, attach them to Form 4670, and submit the complete package to the IRS examiner handling the audit.