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If an employee claims more than 10 exemptions on their Form W-4, does the employer have to report this to the IRS?

No, this requirement has been eliminated. In the past, employers had to routinely send the IRS any Form W-4 (PDF), Employee's Withholding Allowance Certificate, claiming more than 10 allowances or claiming complete exemption from withholding if $200 or more in weekly wages was expected. However, Forms W-4 are still subject to review. Employers may be directed, in a written notice or in future published guidance, to send certain Forms W-4 to the IRS. The IRS also will be reviewing employee withholding compliance, and you may be required to withhold income tax at a higher rate if notified to do so by the IRS.