HOW TO STOP
IRS Garnishment / IRS Wage LevyAn IRS garnishment / IRS wage levy is the IRS tool that will get your attention immediately. There's nothing like taking your paycheck or Social Security benefit to gain your co-operation.
For salaried employees, the IRS garnishment / IRS wage levy is a favorite tool of the IRS because it is so easily accomplished. The IRS computer can match your information and send out a Levy order to your employer very easily.
If you have a back tax liability, the IRS has the right to seize any real property or personal property you own. Real property includes things such as homes, autos, jewelry or artwork (anything that can be turned into dollars). Personal property also includes categories such as money held in bank accounts, brokerage accounts, savings accounts, checking accounts, your paycheck or your Social Security benefit. An IRS Garnishment / IRS Wage Levy is considered personal property seizures.
Are You Facing an IRS Garnishment?
|IRS Tax Debt|
In executing an IRS Garnishment / IRS Wage Levy, the IRS will let you know it is coming through a series of notices. It is important that you read and understand the various notices sent to you by the IRS. Each notice has different rules and regulations. There are counter moves associated with each notice.
- The IRS must have sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing ( CP 90, CP 91, Letter 1058 ) at least 30 days before the execution of the IRS Wage Levy / IRS Garnishment.
It isn't necessary to have actually received the IRS Notice to be valid. The IRS only has to send the notice. After that, it is your problem.
The amount of the IRS Garnishment is determined by a formula calculating the tax owed, the number of dependents you claim and other issues beyond the scope of this article. Generally, you can expect the IRS to come up with a figure equivalent to between 30 and 100 percent of each of your paychecks. As an example, if you receive a gross paycheck of $1,000 every two weeks, the IRS could take $500 of the gross if the wage garnishment is for 50 percent of the check. You will still have your deductions taken from your check as well. This will occur with every paycheck you receive until the IRS tax debt is paid off and your employer is responsible for making the payment, which means you can’t try to hide your paycheck. You will be left with nearly nothing.
Can You Afford to Have your Paycheck Seized?
- How will you pay your rent?
- How will you pay your utilities?
- How will you make your car note?
- How will you pay for groceries for you and your family?
You could negotiate with the IRS on your own. It isn’t recommended. Everything you say can be used against you and the IRS agents are very good at interrogating taxpayers. The function of the IRS is to collect as much money as possible. You are not going to "outsmart" the IRS by negotiating yourself. You do not know the IRS Manual. You are not an experienced Tax Attorney. You do not have any experience negotiating with the IRS.
A better way to go is to hire an experienced tax attorney that has negotiated with the Collection Division of the IRS on many occasions. Only a Tax Attorney, a C. P. A. or an Enrolled Agent can represent you before the IRS. A good tax professional should be able to get the IRS to significantly lower or completely terminate your IRS Garnishment / IRS Wage Levy in exchange for a payment plan. Anyone can put you into a very bad Installment Agreement with the IRS. Before you agree to any payment plan with the IRS, your balance due needs to be reduced to the lowest amount possible.
Factors such as allowable expenses (rent, mortgage, health insurance, child support, utilities, a court ordered payment, secured loans) need to be considered before you agree to anything.
It may be recommended that you pursue an IRS settlement through the IRS Offer in Compromise program, wherein the IRS will agree to eliminate or dramatically lower your IRS tax debt.
The IRS has announced an easing of the IRS Offer in Compromise program so that more taxpayers can be qualified and accepted for settlement. While your Offer in Compromise is being processed, all collection activity must cease.
You may be Currently not Collectible / Currently Uncollectible. You may not have the ability to pay anything toward your back tax debt according to IRS Rules. If that is the case, you could be granted Currently not Collectible status. Over a period of 18 to 24 months, you will not pay anything to the IRS. The Statute of Limitations will continue to run. At the end of this period, you will be required to show your present financial condition. If nothing has changed, you continue to "run out the collection clock".
Obviously, any of these situations represents a major improvement over having your wages garnished.
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