For example, what if they're hostile and want to blame the company because they (the employee) owed money to the IRS?
Been a while, but once upon a time I did some looking on the IRS website and found a "letter" specifically to individual taxpayers saying that it is THEIR responsibility, not their employers to ensure that the correct amount of taxes are withheld. Of course if you keep looking you will find a "letter" to employers saying that we will also come after you if mistakes are made.
Now is the employee going to like the answer? Heck no. This is why you are being paid such a huge amount of money. There is no answer you can give that will make this employee happy.
I will verify the W-4 with the employee and ask them if that is their signature, then have them look at their payslip(s) to verify the system matches what they requested, as long as they match I very nicely say " I'm sorry, unfortunately I'm not a tax accountant and do not know you WHOLE financial situation, so all I can say is based on your W-4 and the tax charts, we deducted the necessary amount. You may want to talk to your accountant and she what they advise". Now when their accountant calls and starts telling me I have no clue to what I am talking about and I should have KNOWN how much he needed to come out of his check... again, with a smile on my face, I'm sorry, I'm not his accountant and I can NOT give him tax advise, that's YOUR job. That is normally the end of the discussion.
Also, payroll NEVER wants to give tax advise to employees. If your company does not have a formal policy to that effect, then (IMO) get one.
The fact an employee owes tax when they file either their state or federal returns does not mean payroll tax was held incorrectly. You do not know an employees personal situation. (EG: do they have a second job, do they have a spouse who works, did they prepare their W4 in line with what they report on their tax returns). Verify all all your tax updates were loaded timely into your Payroll Software. If you verify the correct amount was withheld based on the live/work scenario (for States/Locals) and how they completed their W4, you should recommend the employee speak with a tax advisor. You may direct them to the IRS website for the Withholding calculator: https://apps.irs.gov/app/withholdingcalculator/
As mentioned by others, do not give tax advisor.
I have a one page letter for this, it actually works as a new employee handout as well, and as a handout to include with W2 forms (handles those whose W4 forms expire annually, as well as a reminder to all).
States I must withhold based on the employee instructions provided on the last valid W4 (which I offer to give a copy of). If no valid W4, I must withhold as S0. States that is my absolute and only responsibility for those calculations, to do what the employee directed withing the tax agency framework. If the employee prefers to withhold more or less, they should consult with their tax expert for advice/instructions.
States anyone claiming exempt needs to submit a new W4 for the new year ASAP, to avoid going to S0.
Includes the web address to PUB 15 in case they wish to see the rules I must follow.