IRS Form 4670 Guide: Withholding Tax Relief for Employers

1. Introduction – What is Form 4670?

IRS Form 4670, titled “Request for Relief From Payment of Income Tax Withholding,” is an official federal tax form. It is governed and administered by the Internal Revenue Service (IRS) under Section 3402(d) of the Internal Revenue Code.

This form is used by employers and business owners who face IRS assessments or audits for unpaid federal income tax withholding. It serves as the master cover application requesting that the IRS waive the employer’s liability for unwithheld income taxes because the affected workers already reported the earnings and paid federal income tax on their individual returns.

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

When the IRS conducts an employment tax audit or determines that an employer misclassified employees as independent contractors, the IRS assesses back federal income tax withholding against the employer for all unwithheld wages.

However, if the workers already included those payments on their personal Form 1040 tax returns and paid the income tax owed, collecting the tax again from the employer would result in double taxation. Form 4670 solves this issue by allowing employers to request statutory relief under IRC Section 3402(d), using signed worker statements to prove the taxes were paid.

3. Who Needs to File This Form – Eligibility Criteria

Form 4670 is filed exclusively by employers and business payers. You need to file this form if you meet the following criteria:

• You are an employer facing an IRS employment tax audit, proposed tax adjustment, or worker reclassification review.
• The IRS has assessed or proposed an assessment for unpaid federal income tax withholding on wages or payments made to workers.
• You have collected signed IRS Form 4669 statements (“Statement of Payments Received”) from the affected workers confirming they paid income tax on those earnings.

4. Who Is Exempt / Not Required to File

Form 4670 is not used in routine, day-to-day payroll processing. You do not need to file Form 4670 if:

• Your business properly withheld federal income tax from all employee paychecks and submitted standard Form 941 quarterly filings.
• You are unable to obtain signed Form 4669 statements from your workers (without Form 4669 attachments, Form 4670 cannot be granted).
• You are seeking relief for unpaid Social Security, Medicare (FICA), or federal unemployment (FUTA) taxes (Form 4670 applies strictly to federal income tax withholding).

5. When to File – Deadlines and Timing Rules

Form 4670 is an event-based application submitted during or immediately following an IRS employment tax examination.

There is no fixed annual deadline for Form 4670. However, employers must submit Form 4670 within the specific response window provided by the IRS examiner or as outlined in official IRS examination notices (such as a 30-day letter proposing employment tax adjustments).

6. Where and How to File

Form 4670 serves as the master summary document for your relief request and must be submitted together with its supporting worker statements:

1. Complete Form 4670, detailing the total payroll relief requested and listing every affected worker.
2. Attach an original, signed IRS Form 4669 statement for each worker listed on Form 4670.
3. Submit the complete package directly to the IRS employment tax auditor handling your examination or mail it to the IRS address as per instructions on your audit notice.

Do not mail Form 4670 by itself. It will be rejected if it is not accompanied by signed Form 4669 attachments.

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

Form 4670 summarizes your business details and aggregates worker relief figures. The table below outlines the primary fields on the form:

Form Section	Field Name	Filing Instructions
Header	Employer Details	Enter your legal business name, Employer Identification Number (EIN), business address, and contact phone number.
Audit Details	Tax Periods Under Review	Specify the exact calendar years and quarterly tax periods (Form 941 periods) covered by the IRS tax examination.
Worker Summary	Schedule of Workers	List each worker’s legal name, Social Security Number (SSN), tax year, total wages paid, and the specific income tax withholding relief requested.
Relief Totals	Total Income Tax Relief	Calculate and enter the aggregate total of federal income tax withholding relief claimed across all attached Form 4669 statements.
Signature	Employer Declaration	An authorized corporate officer, partner, or sole proprietor must sign and date the form under penalties of perjury.

8. Required Documents/Information Needed Before Filling

To ensure your Section 3402(d) relief request is accepted, gather the following records before completing Form 4670:

• Your legal business name, EIN, and official audit reference/notice numbers.
• The exact list of tax quarters or years under IRS employment tax examination.
• Payroll records showing total payments made to each affected worker for each tax year.
• An original, signed IRS Form 4669 statement from every worker for whom withholding relief is requested.

9. Common Mistakes to Avoid

Errors on Form 4670 can lead to an immediate denial of withholding relief by the IRS. Avoid these frequent mistakes:

• Submitting without Form 4669 attachments: Filing Form 4670 without including signed Form 4669 worker statements (Form 4670 cannot be approved without Form 4669 proof).
• Requesting FICA or FUTA relief: Attempting to use Form 4670 to reduce Social Security, Medicare, or unemployment tax liabilities (IRC Section 3402(d) only waives income tax withholding).
• Math errors in summary totals: Entering aggregate relief totals on Form 4670 that do not match the sum of the individual Form 4669 statements attached.
• Missing audit deadlines: Failing to submit Form 4670 before the IRS auditor finalizes the employment tax examination report.

10. Penalties for Non-Filing or Errors

If an employer fails to submit Form 4670 (or cannot obtain signed Form 4669s from workers), the IRS will enforce the full proposed assessment for unpaid federal income tax withholding.

Furthermore, while an approved Form 4670 waives the income tax withholding assessment under Section 3402(d), it does not eliminate interest charges or statutory penalties assessed for failure to withhold or failure to file payroll tax returns. Intentionally submitting fraudulent Form 4670 requests carries severe civil and criminal perjury penalties.

11. Related Forms or Schedules

Form 4670 works directly alongside several core employment tax forms, including:

• Form 4669 – Statement of Payments Received
• 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 the difference between Form 4670 and Form 4669?

Form 4669 is the statement signed by an individual worker confirming they paid tax on their earnings. Form 4670 is the master cover form submitted by the employer aggregating all Form 4669s to request relief from the IRS.

Does Form 4670 relieve employers of Social Security and Medicare taxes?

No. Form 4670 only provides relief for unpaid federal income tax withholding under IRC Section 3402(d). Employers remain liable for the employer and employee shares of FICA (Social Security and Medicare) and FUTA taxes unless separate worker classification relief applies.

Can I submit Form 4670 electronically?

Form 4670 and its attached paper Form 4669s are generally submitted directly to the assigned IRS employment tax auditor or mailed/faxed as paper documentation to the IRS audit unit handling your case.

What section of the Internal Revenue Code authorizes Form 4670 relief?

Form 4670 relief is authorized under Internal Revenue Code Section 3402(d), which prevents double-collection of federal income taxes when workers have already paid the tax on their Form 1040 returns.

What happens if a worker refuses to sign Form 4669?

If a worker refuses or is unable to sign Form 4669, you cannot claim Section 3402(d) relief for that specific worker’s payments on Form 4670, and you will remain liable for the income tax withholding assessment for those wages.

Does filing Form 4670 eliminate IRS audit interest?

No. Even if Form 4670 relieves you of the underlying income tax withholding principal, the IRS will still assess interest and failure-to-withhold penalties calculated from the original tax due dates.

13. Conclusion – Key Takeaways

IRS Form 4670 is an essential administrative tool for employers undergoing payroll audits or worker classification adjustments. It provides a formal legal process under IRC Section 3402(d) to eliminate double taxation by requesting relief from unpaid federal income tax withholding assessments.

To successfully obtain relief, employers must compile accurate wage summary schedules on Form 4670, attach original signed Form 4669 statements for every worker listed, and submit the complete package to the IRS examiner before audit deadlines expire.