Fundamental Payroll Certification (FPC) Practice Exam

Form 668-W is specifically used as a Notice of Levy on Wages, Salary, and Other Income. This form is issued by the IRS to inform the payer (such as an employer) that they must withhold a portion of an employee's wages to satisfy a tax obligation of the employee to the IRS. When an employee has unpaid taxes, the IRS can place a levy on their wages, which mandates the employer to redirect a specified amount directly to the IRS, thereby facilitating the collection of the owed taxes.

This form is critical for compliance with federal tax laws and for ensuring that the IRS can collect debts owed by the taxpayer. It outlines the details of the levy, including the amount to be withheld, which the employer is obligated to follow. Understanding the implications of Form 668-W is essential for payroll professionals, as it directly affects payroll processing and can impact an employee's take-home pay.

The other options pertain to different forms used within payroll and tax administration but do not represent the functions of Form 668-W. For instance, a request for federal income tax withholding would typically involve a different form (like the W-4), while the employer's quarterly federal tax return relates to tax reporting (Form 941). A statement of employee