Below are the IRS Levy rules & your rights regarding an IRS Wage Levy. Should you need immediate attention and IRS help, contact Flat Fee Tax Service.
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IRS Wage Levy / IRS Garnishment (Paychecks, Social Security, & SSDI)
RULES & RIGHTS: IRS Wage Levy / IRS Garnishment (Paychecks, Social Security, & SSDI)
There are only a few requirements that must be met before the IRS Executes an IRS Bank Levy / IRS Wage Levy / Tax Levy:
1. The IRS must have assessed the tax debt and sent a IRS Levy Notice and Demand for Payment (CP 90 or CP 91)
2. The taxpayer must have neglected or refused to pay the back tax debt and,
3. The IRS must have assessed the tax debt and sent a IRS Levy Notice (Bank Levy / IRS Wage Levy / Tax Levy) and Demand for Payment
The IRS can serve the Final Notice to Levy in person, leave it at your home or usual place of business, or send the Notice of IRS Levy / IRS Wage Levy 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 Bank Levy or IRS Wage Levy Notice) to your last address known to it. The taxpayer does not need to actually receive the Notice for IRS Bank Levy or IRS Wage Levy for the Levy to be effective.
You may never actually receive the IRS Levy Final Notice. You may not realize that you are in danger of receiving an IRS Wage Levy / IRS Garnishment until your wages, paycheck or Social Security Benefits are actually garnished or your Bank account has been seized.
The Bank will be instructed to freeze all of your funds for 21 days (includes Saturday and Sundays) that are in your Bank accounts at the time of the IRS Levy. Your Bank is ordered to forward your funds to the IRS at the end of the 21 day period unless there is a release of the Levy. Banks are obligated to follow the IRS Levy instructions.
Our highly skilled IRS Tax Attorneys can have your funds released back to you. Remember, you have 21 days to get your bank account money returned. You do not have a lot of time. You should contact Flat Fee Tax Help as soon as you receive the IRS Levy Letter / IRS Notice to Levy. The IRS commonly uses an IRS Levy as a way for collecting back income taxes and this will have a devastating impact on a taxpayer's financial situation.
If you want us at Flat Fee Tax Service to help with the Levy removal, we will need the name of your Bank or employer along with the phone and fax to the person at your Bank or employer that is handling your IRS Levy. Once one of our Flat Fee Tax Service Attorneys has secured the IRS Bank or Wage Levy Release, we will forward your Release of Levy / Release of Property from Levy (Form 668-D) to your bank or employer via fax or email.
If the IRS executed an IRS Levy on your Bank, you can be sure that their next step is to proceed with an IRS Wage Levy / IRS Garnishment. The IRS will demand that your employer seize a portion of your wages. The money seized due to the IRS Wage Levy / IRS Garnishment on your wages / paycheck will be sent directly to the IRS. IRS Section 6334 does allow for an exempt amount that must remain outside of the IRS Garnishment / IRS Wage Levy but the amount of money that you will be left with will be so small that the IRS will leave you without enough money to satisfy your regular living expenses.
A IRS Wage Levy / IRS Garnishment upon your paycheck, Social Security or Social Security Disability Benefit (SSDI) is considered to be a continuous IRS Wage Levy / IRS Garnishment. An IRS Wage Levy needs to be applied only once and will be applicable to your future wages, Social Security or Social Security Disability (SSDI) until either Released by the IRS under IRS Section 6343 or your back tax debt is fully paid. As your future wages or paycheck are earned, no additional IRS Wage Levy / IRS Garnishment action is necessary by the IRS to take a large portion from your paycheck, Social Security or Social Security Disability (SSDI) unless steps are taken to release/remove the IRS Wage Levy / IRS garnishment.
Section 6334 (c) of the Internal Revenue Code (26 U.S.C. 6334 (c)) allows Social Security Benefit and Social Security Disability (SSDI) subject to an IRS Wage Levy / IRS Garnishment for collection of your unpaid Federal Tax Debt.
If you are a Senior Citizen relying on Social Security or Social Security Disability (SSDI) for your income and you have an IRS Wage Levy attached to your Social Security, the IRS will be taking a major portion of your very limited monthly check.
Through the Federal Payment Levy Program (FPLP), Social Security or 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 Levy, to pay your delinquent IRS back tax debt if you choose to do nothing.
Because the FPLP is used to satisfy IRS tax debts, the IRS may levy your Social Security or 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 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 is not limited by IRC 6331(h) to taking 15% of your paycheck, Social Security or your Social Security Disability Benefit (SSDI).
The IRS can issue a manual levy that can continuously take ALL of your Social Security or Social Security Disability (SSDI) benefits as well as your paycheck / wages under IRS Code section 6331(a), which permits an IRS Levy on all your wages, salary, Social Security or Social Security Disability (SSDI)].
The 15% automatic IRS Levy provision is a supplement to the manual IRS Levy power. The IRS can chose the manual approach if it deems fit and can collect more than the automated 15%. An IRS Revenue Officer may use the Manual Levy when there are unfiled tax returns and/or large amounts of back tax debt.
"Currently Uncollectible" also known as Currently not Collectible (CNC) is a method for delaying payment (possibly eliminating payment) of your IRS Tax debt if you cannot pay your tax liability.
When you, the taxpayer, are unable to make installment payments to the IRS and can prove that enforcement of an IRS Wage Levy / IRS Garnishment would create significant undue economic hardship by depriving you, the taxpayer, of basic living necessities the IRS and some States will classify the account as Currently Uncollectible / Currently not Collectible (CNC) and grant hardship status to suspend collection activity.
The IRS will consider you "currently not collectible" and this status will usually be for a period of 18 to 24 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 enjoy the Currently Uncollectible status with the IRS, you will not be expected to pay any of your back tax debt. Your statutory period (IRS Statute of Limitations) does not freeze or stop. The Statute of Limitations continues to decrease as usual and the collection clock can run out.
Proving your Currently Uncollectible / Currently not Collectible status to the IRS is easier said than done. Anyone who is not familiar with the specific and very detailed methods used by the IRS to make their Currently Uncollectible calculations will be facing a daunting task. The IRS will not help you. If you cannot pay your back tax debt, you don't have to suffer in these economic times.
The above information should give you a good idea of what you can expect should you have an IRS Wage Levy.