IRS Wage Levy and Garnishment
IRS wage levy is a legal seizure of property to satisfy a tax debt. IRS levies are different from tax liens. Tax lien is just a claim used as security for the tax debt, while a IRS levy actually takes the property to satisfy the tax debt. IRS wage levy has the same nature, except taxpayer's wage (not property) is used to pay off the debt. This process is also called a Wage Garnishment.
IRS wage garnishments are one of the means used by the state and the IRS to collect taxes. The procedure also involves taxpayer's employer in the following way. The employer is required to collect a percentage of each and every paycheck, if a garnishment is filed. This means that a large percentage of taxpayer's wages be directed right to the IRS or to the state. The wage garnishment effect lasts until the tax is fully paid or until the garnishment is the released by IRS or the state.
The marital status and number of dependents of the taxpayer usually serve as a basis for calculating of the amount that the IRS can keep from any wage garnishment. As a rule, the IRS garnishes most of the money from a paycheck. The final amount of the income available for the exempt from an IRS wage garnishment is calculated by adding the standard deduction one can claim on his or her taxes and the amount available for exemptions, divided by 52. Thus, a family of three will only be allowed to keep about $325 per week, if subjected to a wage garnishment. The actual amount of money that can be legally garnished varies from state to state. Say, California tax agencies such as The Franchise Tax Board or The State Board of Equalization can only gather no more than 25% of the taxpayer's disposable wages.
Our tax attorneys aid lots of our clients addressing us for emergency help with a garnishment. We understand that a regular paycheck is vital to our clients and that a wage garnishment can be devastating, especially to those with families. Once called for help, our tax lawyers immediately contact the IRS or the state to negotiate the release of wage garnishment. One must keep in mind that releasing or lowering a garnishment is only a temporary solution. Our tax attorneys proceed by developing a long-term strategy for coping with the tax bills. When IRS wage garnishment is released, we suggest our client either to set up a payment plan or submit an offer in compromise.
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