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Month: October 2020

What Is An IRS Wage Garnishment?

If you owe back taxes, the IRS is then authorized to seize your wages or properties and take a portion of your paycheck. However, to do this, strict guidelines must be followed. The IRS will get in touch with your employer and instruct them accordingly to take a portion of your pay.

Your employer will then send the money to the agency. The employer should comply with this right away or else the liabilities could be passed on to him or her. Understanding the rules of engagement with IRS wage garnishment will arm you with the knowledge to file for an appeal or even to stop it.

How Much of Your Salary Can the IRS Garnish?

If you fail to comply or resolve the issue upon receipt of the Notice of Your Right to a Hearing and Final Notice of Intent to Levy, the IRS will then proceed with garnishing your wages.

The IRS has the power to garnish bonuses, salaries, commissions, wages, and even your pension and retirement fund. The IRS will not just take out a specific percentage of your wage. It will instead dictate how much you would need and then garnish the rest. The IRS makes a decision based on a table that helps them to determine the amount that can levy from your salary for each pay period. The amount that is exempted from the IRS levy will depend on the standard deduction imposed on your pay as well as the number of dependents that you have. More so, your filing status, the number of exemptions you have as well as your payment frequency will help your employer determine the specific amount of money that you get from each pay period.

The amount that will be left in your paycheck would most likely be below your spending needs. As of 2017, single individuals with one exemption will be left with only $200 per week or equivalent to $866.67 monthly. Now, if you’re married and filed jointly declaring four dependents, then you get to keep $555.77 weekly or about $2408.33 monthly. So, with that in mind, any excess amount can then be taken by the IRS.

For instance, if you juggle two jobs and the other one covers your daily expenses, the IRS may take 100% of your salary from that other employment you have. Also, if your employer gives you a bonus, the IRS may also take that.

This levy stays in effect until you have completely paid off of your tax debt, or if you have made some arrangements or alternative payment options with the IRS. In the same way, the agency will also release or stop the levy once the statute of limitations imposed on collection is in place.

When Will the IRS Implement a Wage Levy and Garnish Wages?

Tax levy follows after a tax lien and when you have been delinquent in tax payments. There are some instances, though, that the IRS would skip the tax lien and rolls out the levy process right away.

A tax levy is the process wherein the IRS seizes your assets in order to satisfy tax owed. The IRS has the authority to collect from your wages, properties, Social Security benefits, bank accounts, property, commissions, retirement accounts, rights to property, and so forth. If you are working for an employer, IRS can go for a wage levy to garnish a percentage or all of your paycheck. In order to levy properties, paycheck, or any form of assets, the agency must adhere with the following rules and requirements.

The IRS has reviewed tax liability and sent taxpayer a notice to demand for Payment.

The taxpayer has refused or failed to settle taxes owed.

The IRS has forwarded you two notices – Notice of Your Right to a Hearing and Final Notice of Intent to Levy which must be sent to the taxpayer 30 days before the levy is in effect.

The IRS has two delivery options: send the notices via registered mail to your home address or employment address or deliver the notices by hand. Either way, once you receive the notices of Final Notice of Intent to Levy and Notice of Your Right to a Hearing, the IRS can now proceed to levy after a period of 30 days.

IRS Levy Exceptions that Do Not Provide a 30-Day Advance Notice.

The IRS will not always give you that 30-day standard notice to remind you of your right to hearing. They may move forward to levying your property or seizing your assets. Below are some scenarios that do not warrant any advance notices:

Jeopardy Levy .

In the event that the IRS feels tax collection activities are in jeopardy, then they can go ahead with levying your property without the need to send out a notice in advance.

A Disqualified Employment Tax Levy.

If in case you have already requested before for a collection due process hearing for employment taxes or payroll for a particular tax period in the last two years, then the IRS can proceed to levy for the other tax periods even without providing you any advance notice of such activities.

Federal Contractor.

Being a federal contractor, the IRS can automatically seize your assets or properties without any advance written notice.

State Tax Refund Levy.

The IRS can go ahead to levy state tax refund without providing you advance notice.

Requesting for an appeals conference at the earliest possible time or within the 30-day period can help deter wage levies or seizure of your assets

The IRS would rather not impose such wage levies because these activities are not cost-efficient. The IRS would rather use such as a threat to evoke action.

However, if all else fails and you do not file any dispute to challenge such levies then IRS will push through with levying your wages or properties.

In order to prevent this, it is advisable to request a free consultation from a licensed tax specialist to help you weigh your options before responding to a final notice.

A licensed tax professional can directly get in touch with the IRS to renegotiate and apply for the most suitable payment plan such as for hardship status or settlement; among others.

IRS Tax Problems: What You Need to Know


For most Americans, it’s difficult to understand completely the Internal Revenue Service. This is why many Americans run into IRS tax problems, and these issues might have resulted from sheer ignorance or other personal reasons.

The IRS could be the harshest collection agency out there, but it’s just doing its job and it has provided several options for those with tax delinquencies to get back on their feet.

The IRS will work with people who are upfront about their problems and are willing to resolve their tax problems. There’s always a solution to tax debt problems. Tax professionals can offer help if you feel like the IRS has no way out.

Unpaid Taxes.

It’s difficult to avoid the IRS and continue to live a normal life when you have unpaid taxes.

There are solutions to this tax problem. But you need to consider the amount you owe the IRS, your existing financial condition, and your future financial situation.

You should not ignore any unpaid taxes you have because the IRS, which can be very understanding of the individuals who are struggling with their day-to-day needs, but will enforce collection efforts where necessary.

It’s always best to be honest with the IRS about your situation and make appropriate filings to save yourself from crippling costs of not doing it anyway.

Tax Liens.

A tax lien is a serious step the IRS can apply against those individuals who owe taxes.

This means the IRS is taking a legal claim over your assets, so you can secure your payments.

The tax lien can be removed if you pay your back taxes or enter into an agreement with the IRS that you will be paying the amount owed.

Tax Levy.

A tax levy is the harshest method the IRS can do to secure your assets and for you to settle your tax liability. These assets could be: house, car, bank account, or anything with monetary value.

You’ll be given 30-day notice before the IRS applies a tax levy. Within 30 days, you will have enough time to stop them from taking away your assets.

Again, this is something that a licensed tax professional such as an Enrolled Agent should help you with.

IRS Wage Garnishment.

IRS Wage garnishment is the most common form of a tax levy that garnishes your paycheck. Your employer has nothing to do with allowing or stopping the IRS from garnishing your paychecks. Employers are bound by law to help the IRS in all collection efforts if they get that far.

Obviously, this means living under financial hardships as most people cannot live without receiving their full paychecks.

There are different ways to stop a wage levy and you should also understand the benefits of hiring tax professionals such as enrolled agents to resolve wage garnishment.

Unfiled Tax Returns.

Did you know that not filing a tax return is much worse than filing a return and not paying for the taxes owed? Nothing raises a “red flag” with the IRS more than simply not filing your taxes in the first place.

You must take action right away to prevent yourself from frustrating IRS actions.

Tax Penalties.

The IRS issue penalties on delinquent taxes owed as a penalty for those choosing to avoid these dire financial decisions.

One shouldn’t underestimate the seriousness of penalties and IRS collection enforcement efforts. BY the time you get to a point where the IRS has levied penalties and other enforcements, the situation has gotten bad.

You need to understand the tax penalties and ways to avoid them. Also, you need to learn how to correct these situations to get yourself IRS compliant.

IRS Letters.

The IRS sends about 75 different types of notices to inform taxpayers about their tax problems or liability.

You should not ignore these notices and make sure to address them straight away.

Tax Audits.

The probability that you will get audited at least once in your lifetime is high. The factors that lead to an audit are numerous, usually stemming from information on tax returns that falls outside the norm for most filers. This could be anything from excessive write-offs, incorrect procedure in supplying information, or anything in between.

Maybe you’re being audited or you simply wanted to avoid any audits You need to have information supporting what you’ve put on your returns.

In closing, these are just a few of the tools the IRS uses to enforce compliant tax collection. In the long run, you are better off never ending up with the IRS singling you out for enforcement. But, if you find yourself in those situations, contact your tax professional today!

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