What action can an employee take using form 2159 to avoid a federal tax levy?

The correct answer involves an employee using Form 2159 to establish a withholding agreement with the IRS, which can help in avoiding a federal tax levy. This form allows an employee to request their employer to withhold a portion of their wages to apply towards their tax liability. By entering into this agreement, the employee can manage their current tax situation proactively, which reduces the likelihood of a tax levy being imposed due to unpaid taxes.

This option is significant as it directly addresses the need for compliance with tax obligations. By agreeing to withhold a specific amount from their earnings, an employee is demonstrating willingness to meet their tax responsibilities, potentially preventing more severe collection actions, such as a levy on their wages.

In contrast, other options do not provide a proactive measure for preventing a federal tax levy. Requesting a refund of taxes cannot prevent a levy since it does not address outstanding liabilities. Reporting additional income could result in a higher tax obligation, which may exacerbate the issue if a lien or levy is already in place. Changing filing status can affect tax calculations going forward, but it does not directly mitigate existing liabilities or arrangements with the IRS related to levies.