IRS Levies and Wage Garnishment
One of the largest threats in owing back taxes is having the IRS issue levies to collect the back taxes. The IRS can issue tax levies against you bank accounts, property, and retirement plans. They can also garnish your wages. Once the IRS issues a levy or garnishment, you have an extremely limited amount of time to attempt to get the tax levy released before your money is sent to the IRS. If you are receiving IRS “Notice of Intent to Levy” or if you have received an IRS or State of Michigan levy, contact Austin & Larson Tax Resolution serving all of Michigan from Howell, MI immediately. We will see what your options are for getting the tax levy released and/or preventing additional tax levies in the future. Call our tax relief helpline now at 1-866-668-2953 to stop IRS garnishment and tax levies. We have had many Michigan clients successfully resolve their back tax debt issues with relief solutions tailored to them.
An IRS wage levy or wage garnishment is issued by the IRS to attempt to collect unpaid back taxes. After sending out a series of collection notices, the IRS can begin issuing levies and garnishing your paycheck collect any unpaid taxes where resolution has not yet been established.
IRS levies are tax-year specific. In order to issue a levy or garnishment on a tax year, the IRS must have properly issued all required collection notices first. The last collection notice before the IRS can issue a levy is a “Final Notice”. This notice will be sent to your last known address certified. You have thirty days from the date of this notice to file for a CDP Hearing. If you do not request a CDP Hearing, the IRS can issue tax levies on this period.
Once the IRS has sent out all required notices on a tax period, that tax period is open to levy at any point in the future until it is either paid, or until resolution is established on the tax year. The IRS can issue levies against your paycheck, your bank account, retirement accounts, and federal payments, such as Social Security. An IRS levy can put you into severe financial hardship, taking your paycheck and wiping out your bank accounts. Once an IRS levy has been issued, it can be difficult, if not impossible to get the funds released. Do not wait until the IRS issues a tax levy to seek help in resolving your tax liabilities. Austin & Larson will, in all likelihood, be aware of the proper tax relief program or course of action for your unique tax debt situation.
What is an IRS Wage Levy (Garnishment)?
There are two types of wage garnishments: a “continuous” garnishment and a “one-time” garnishment. A continuous wage levy is sent out to Michigan W-2 employees. It will be sent to your employer and will instantly attach to your paycheck and will stay in effect until released by the IRS. An IRS wage levy will take the majority of your paycheck, leaving you little to nothing to pay your monthly living expenses with. This levy will continue to hit each paycheck until the levy is paid in full, or until the IRS issues a levy release.
A one-time levy is issued on self-employed individuals. A tax levy notice is sent out to all customers, contractors, insurance companies, vendors, clients, and contractors that may owe you money. These levies attach to any funds owed to you by the third party. For instance, if you are a contractor working on three different projects, the IRS may issue a one-time tax levy to each of these parties. They are then required to pay the IRS any funds owed to you, up to the amount of the levy, when they receive the levy. Failure for them to do so could result in the IRS coming after them to collect the tax debt. Although the levy is a one-time levy, the IRS can continue to issue levies to these third-parties.
What is an IRS Bank Levy?
An IRS bank levy is sent to banks where you have accounts. This tax levy will attach to any account that has your name on it. It may attach not only to your individual bank account, but also joint accounts and accounts that you sign on for minor children.
An IRS bank levy will attach to any funds in your account at the time the tax levy was received. The bank will freeze these funds and send them to the IRS within 21 days. It is very difficult to get the IRS to release a bank levy. Often times, the IRS will not issue a levy release on the funds in your bank account. If they do agree to release the levy, you still have to get the levy release to the bank before the funds are sent to the IRS. As this is such a time-sensitive process, you need to act immediately once you receive a bank levy if you are to have any chance of getting it released. Austin & Larson has a team of professionals and the means to negotiate IRS debt given your bank account tax levy status.
When I Owe a Tax Debt, What Else Can the IRS Levy?
When a tax debt is owed to the IRS, they will issue levies against your bank account and wages. The IRS will also issue levies against any Federal income tax payments received, including Social Security. These levies are generally 15% of your monthly payment, although they can be more. These levies are especially troublesome because they are issued automatically by the IRS computer system. Even if you are working with a Revenue Officer who has agreed not to issue levies for the time being, these automatic levies will be issued on your Federal payments. Tax debt levies against Social Security may take up to sixty days to release in the IRS system.
How Can I Stop a Wage Levy on My Paycheck?
The best way to stop a wage levy is to prevent one from being issued in the first place. However, if the IRS has issued a wage levy against you, you need to get it released as soon as possible. Before the IRS will issue a tax levy release, you will have to meet their conditions to establish resolution on your account. This may include filing back tax returns and providing your financial information. You will also have to show compliance for the current year. You may be able to get the levy partially released based upon your collectability. Once you have gotten to the point that the IRS is issuing paycheck levies, you need to seek professional representation to resolve your taxes and prevent the IRS from issuing any additional tax levies against you.
As soon as you receive any information from the IRS regarding a possible tax levy or garnishment, you should seek immediate IRS help from Austin & Larson Tax Resolution. We serve all Michigan taxpayers at 1-866-668-2953, with the objective of successful tax debt relief and settlement. Stop IRS garnishment now with our help. We are one of the best tax relief companies in Michigan. We care about securing a fresh start for you.