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

Answer:   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. The requirement no longer exists.
• 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 will also continue to review employee withholding compliance. The IRS may send you a letter (commonly called a "lock-in-letter") specifying the withholding rate and allowances to use to calculate the amount of tax to withhold from wages paid to a specific employee.