Why is proper withholding important for wage earners dealing with IRS collections?

For wage earners, having the correct amount of tax withheld from each paycheck is critical to maintaining IRS compliance. Improper or insufficient withholding can:
– Lead to new tax balances, undermining current IRS agreements,
– Trigger penalties and interest, and
– Jeopardize negotiations for relief options like an Offer in Compromise or Installment Agreement.
The IRS views proper withholding as a sign that the taxpayer is making a good-faith effort to stay on track.