- The IRS must have assessed your IRS Tax Debt and sent an IRS Wage Garnishment / Levy Notice and Demand for Payment;
- You have neglected or refused to pay your IRS Tax Debt; and,
- The IRS must have sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (IRS Levy Notice / IRS Wage Garnishment Notice ) at least 30 days before the IRS Wage Levy / Garnishment.
The IRS can serve the Final Notice to Levy / Notice of Wage Garnishment in person. The IRS can leave it at your home or usual place of business, or the IRS could send the Notice of IRS Wage Garnishment to your last known address by certified or registered mail.
It is important to note that the IRS is only required to send the Final IRS Levy Notice (Final IRS Wage Garnishment Notice) to your last known address. The IRS doesn’t require proof that you received the Notice to Levy.
You do not need to actually have received the Notice for IRS Wage Garnishment / IRS Wage Levy for the IRS Levy to be effective.
The IRS will serve an Order to Levy and make a demand of your employer that a portion of your paycheck be sent directly to the IRS. Section 6334 does allow for an exempt amount that must remain outside of the IRS Wage Levy / IRS Wage Garnishment. That amount of money exempt from the IRS Levy is very small, leaving you without enough money to satisfy your regular living expenses.
An IRS Wage Levy / Garnishment upon your paycheck, your Social Security or Social Security Disability (SSDI) is considered to be a continuous IRS Wage Garnishment / Levy. The IRS Wage Levy / Garnishment needs to be applied only once and will be applicable to your future wage / paycheck until either Released by the IRS under §6343 or your back tax debt is fully paid. As your future wages, paycheck, Social Security, or Social Security Disability (SSDI) are earned, no additional IRS Wage Garnishment / IRS Levy action is necessary.
Social Security / Social Security Disability (SSDI) Levy: Section 6334 (c) of the Internal Revenue Code (26 U.S.C. 6334 (c)) allows Social Security Benefits and Social Security Disability (SSDI) subject to an IRS Wage Levy / Garnishment for collection of your unpaid Federal Tax Debt.
Through the Federal Payment Levy Program (FPLP), Social Security / Social Security Disability (SSDI) benefit payments outlined in Title II of the Social Security Act, Federal Old-Age, Survivors, and Disability Insurance Benefits, are subject to the 15-percent IRS Wage Levy / Garnishment to pay your delinquent tax debt.
Because the FPLP is used to satisfy IRS tax debts, the IRS may levy your Social Security / Social Security Disability (SSDI) benefits regardless of the amount. This is different from the 1996 Debt Collection Improvement Act which states that the first $750.00 of monthly Social Security benefits is off limits to satisfy non-tax debts. Fifteen percent of the Social Security / Social Security Disability (SSDI) benefit will be levied through the FPLP regardless of whether or not the remaining benefit sent to you is less than $750.00.
THE IRS CAN TAKE YOUR ENTIRE PAYCHECK AND / OR YOUR SOCIAL SECURITY CHECK / SOCIAL SECURITY DISABILITY (SSDI) CHECK.
MANUAL LEVY: The IRS is not limited by IRC 6331(h) to taking only 15% of your paycheck, your Social Security or your Social Security Disability (SSDI) benefits. The IRS can issue a manual levy that can continuously take all of your Social Security / Social Security Disability (SSDI) benefits as well as your paycheck / wage under Internal Revenue Code section 6331(a), which permits an IRS Levy on all your wages, salary or other income [this would include Social Security / Social Security Disability (SSDI)]. The 15% automatic IRS Levy provision is a supplement to the manual IRS Levy power. The IRS can choose the manual approach if the Revenue Officer deems fit.
In most IRS Wage Garnishment / Levy cases, the IRS will demand your financial information in order to determine how much, if anything, you can afford to pay towards your tax liability. If your file is being handled in the in the automated collections division an IRS 433F form has to be prepared, along with supporting documents. If the file is with an IRS Field Agent, an IRS 433A form (more detailed) has to be prepared and filed with the IRS Agent.
You May Be Currently Uncollectible: If you do not have enough income to pay your IRS Tax debt, you may be "Currently Uncollectible". This is a method for delaying payment of the debt.
When you, the taxpayer, are unable to make installment payments and can prove that enforcement of an IRS Wage Levy or IRS Wage Garnishment would create significant undue economic hardship by depriving the taxpayer of basic living necessities the IRS, and some States, will classify the account as currently uncollectible and grant hardship status to suspend collection activity. Usually this is for a period of one year / twelve months to 18 months. At the end of the Currently Uncollectible period, you, the taxpayer, will need to show the IRS that your economic situation has not changed. As long as you are "Currently Uncollectable", you will not be expected to pay any of the IRS tax debt. Yet, your statutory period (IRS Statute of Limitations) does not freeze; Time continues to pass on your IRS Tax Debt.
Proving a Currently Uncollectible status to the IRS is easier said than done, especially for someone who is not familiar with the specific and extraordinarily detailed method the IRS takes to calculate and determine whether or not a taxpayer can make payments and how much they have to pay.
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