What document may the IRS issue after reviewing personal income returns that directs a change in exemptions?

The IRS may issue a Lock-in Letter after examining personal income tax returns, which is specifically designed to affect an employee's withholding allowances. This letter informs the employee that their current number of exemptions is too high and directs them to adjust their Form W-4 to reflect a specified number of exemptions. The purpose of this document is to ensure that the correct amount of federal income tax is being withheld from the employee's paycheck, thus preventing under-withholding and potential tax liabilities at the end of the year.

Other options like Notice of Adjustment, Exemption Certificate, and Taxpayer Notice do not hold the same regulatory function in connection with adjustments to withholding allowances as the Lock-in Letter. A Notice of Adjustment typically relates to modifications that the IRS makes to a tax return or assessment, while an Exemption Certificate is a document used by employees to claim exemptions for specific tax purposes and is not issued by the IRS. A Taxpayer Notice could encompass various communications sent to taxpayers but does not specifically pertain to directing changes in exemptions.