When you fill out a W-4 you can elect to have no federal withholding. Companies are required to have the paperwork on file but there is no law requiring withholding. That withholding is sold as a convenience so we don't actually write a check to the IRS every year. Instead they take it little by little out of every check and usually more than it should be, then we get a partial "refund" and it makes people feel warm and fuzzy.