IRS recognizes Redeeming Lawful Money - Yes!!!

[Goldi]

Speaking from experience, one can start with the employer 100% behind standing up to the IRS and then completely turn.

26 CFR 1.1461 creates a liability on the employer if he continues to withhold when you make the claim of exemption from a Subtitle A tax. The definition of withholding agent is one who is allowed to withhold from a 26 CFR 1.1441 foreign person, a 1.1442 foreign corp. or a 1.1443 foreign organization. If you are not one of those, then the authority to withhold is destroyed, making the employer vulnerable to be sued. It's really not a matter of "standing up" to the IRS. It's a matter of reading that code and being in compliance with it or get your butt handed to you in court.