What is the purpose of the payroll deduction agreement form 2159?

The payroll deduction agreement form 2159 is specifically designed to establish a repayment plan for federal tax debts owed by employees. This form allows employees to request that their employer withhold a portion of their wages to satisfy outstanding federal tax obligations. By doing so, the employee can proactively manage their tax liabilities and ensure that payments are made in a timely manner.

This process helps the employee avoid potential penalties that can arise from failing to pay taxes owed, and it also reduces the risk of having their tax refunds offset to settle debts. The use of this form creates a formal agreement between the employee and the IRS, facilitated by the employer’s involvement in the payroll process.

Understanding the purpose of form 2159 is crucial for payroll professionals as it highlights the role of payroll in managing employees’ compliance with tax laws and ensuring that proper deductions are being made in accordance with federal guidelines.