Everything you need to know about a IRS Tax Levy – Former IRS Agents – Levy Relief    1-866-700-1040

 
 
There are a lot of misconceptions about the IRS tax Levy.
You can get a levy released in 24 hours using us.
I hope this information proves useful to you as my goal is to try to enlighten you about to use of the Internal Revenue Service’s most powerful collection tool the IRS tax Levy.
Being a former IRS agent I issued thousands upon thousands of these levies on bank accounts, on employees wages, and on third parties to collect the back tax debt of  taxpayers.
The IRS issues close to 4 million bank and wage levies each year. There is a downward trending pattern that exists today on the use of the IRS levy which is good to see.
Before IRS can send a levy to a taxpayer or to a business  must complies with the tax rules and tax codes regarding the IRS levy and they are as follow:
 

These three requirements are need to be met:

 
1. The IRS assessed the tax and sent you a Notice and Demand for Payment;
2. You neglected or refused to pay the tax; and
3. IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy.
 
IRS also need to:
We may give you this notice :
1. in person,
2. leave it at your home or your usual place of business, or
3. send it to your last known address by certified or registered mail, return receipt requested.
Please note: if we levy your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.
 
 

Employer Threatens to Fire Taxpayer Because of a Levy

 
Sometimes an employer threatens to fire an employee to avoid handling a levy.
This might be a violation of 15 USC 1674.
If the employer fires the taxpayer because of this, the employer might be fined not more than $1000 or imprisoned for not more than one year, or both.
Refer the taxpayer to the Wage and Hour Division of the Department of Labor (DOL). DOL, not IRS, must decide if the employer violated the law.
 

Continuous Effect of Levy on Salary and Wages

 
Unlike other levies, a levy on a taxpayer’s wages and salary has a continuous effect.
It attaches to future payments, until the levy is released. Wages and salary include fees, bonuses, commissions, and similar items.
All other levies only attach to property and rights to property that exist when the levy is served.
As an Example:
If a bank account is levied, it only reaches money in the account when the levy is served.
It does not and cannot reach money deposited later. Another levy must be issued.
When other income is levied, the levy reaches payment the taxpayer has a fixed and determinable right to.
If the taxpayer’s right to that payment is not dependent upon the performance of future services, then the levy will reach the future payments as well.
 

Retirement Income.

 
A Form 668-A is issued to levy an author’s royalties. The author has a fixed and determinable right to royalties for books that have already been published. The levy reaches royalties for sales of those books in the future.
The levy does not reach royalties for books that are written and published later. A new levy must be served to take those royalties.
A Form 668-W is issued to levy a taxpayer’s retirement income. The taxpayer has a fixed right to the future payments; therefore, the levy remains in effect until it is released.
Also, see IRM 5.11.6.12, Levy on Non-Liable Spouse in a Community Property State for guidance when the wage levy on the non-liable spouse is not continuous.
 

Exempt Amount

 
Part of the individual taxpayer’s wages, salary, (including fees, bonuses, commissions and similar items) and other income, as well as retirement and benefit income, is exempt from levy.
 
The weekly exempt amount is:
The total of the taxpayer’s standard deduction and the amount deductible for exemptions on an income tax return for the year the levy is served.
Then, this total is divided by 52.
Income that is not paid weekly is prorated, so the same amount is exempt.
In addition, the amount the taxpayer needs to pay court ordered child support is exempt.
The support order can originate from a court or administrative process under the laws and procedures of a state, territory or possession.
If support is allowed, the same child can not be claimed as an exemption for figuring the exempt amount.
See IRM 5.11.5.4 (2)a above.
If Then:
The taxpayer has already shown proof of the required child support payment Write on the levy form,
“Under section 6334 (a)(8) of the Internal Revenue Code, $ ____________________is exempt from this levy.”
The taxpayer shows proof of the child support after the levy is served Release enough of the levy so the support can be paid.
The taxpayer is not entitled to the support exemption unless the support is being paid.
Consider getting the taxpayer to have the child support payment withheld and sent directly to the person with custody.
Or, the taxpayer may make the child support payment through the Service, and the Service will forward the payment. When there is no open assignment, have the payments sent through Submission Processing.
This may happen if the payments are being monitored in the campus.
 

Claiming the Exempt Amount

 
The Notice of Levy on Wages, Salary, and Other Income (Form 668-W) was developed for use when an individual may be entitled to the minimum exemption from levy in IRC 6334(a)(9) and includes a Statement of Exemptions and Filing Status.
The employer gives the statement to the taxpayer to complete and return within three days. If it is not received by then, the exempt amount is figured as if the taxpayer is married filing separate with one exemption.
The taxpayer can give the statement to the employer later to change the exempt amount.
The employer needs to use this statement rather than the employee’s W–4, Employee’s Withholding Certificate.
Taxpayers may claim different exemptions for withholding from those claimed on their return.
 
Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income – Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS), is sent with the levy to help figure the exempt amount.
 
The taxpayer can give a new statement to the employer later to have the exempt amount recomputed.
The taxpayer’s filing status or personal exemptions may change.
 
There may be a change in exempt rates in a new year.
The statement is completed under penalty of perjury. Generally, accept the information on the statement, unless there is reason to question it.
If exemptions are disallowed, notify the employer and the taxpayer in writing. The taxpayer can provide evidence that the statement is right and request managerial review.
Include a statement that the taxpayer may provide evidence to prove the statement is accurate and may request a managerial review of the dis-allowance.
 

Employers with Centralized Payrolls

 
Some employers have a centralized payroll, so the payroll is not handled where most employees work.
Consider mailing the Statement of Exemptions and Filing Status directly to the taxpayer. This avoids the delay of the employer re-mailing it.
Send to the employer Part 1 of the levy form and Notice 484, Instructions to Employer with Centralized Payroll for Processing Statement of Exemptions and Filing Status.
Send to the taxpayer the other parts of the levy form and Notice 483, Instructions to Employee Paid through Central Payroll System for Submitting Statement of Exemptions and Filing Status.
 

Joint Liabilities

 
For joint liabilities, generally levy the income of the spouse with the larger income.
Levy both incomes only in flagrant cases of neglect or refusal to pay. Secure group manager approval to issue notices of levy on the income of both spouses’ living in the same household. If taxpayers are separated, consider collecting from both spouses’ income rather than collecting from one spouse’s income.
 

Getting a Tax Levy released from the IRS

 
If the IRS has issued you a notice of Federal tax levy you can get a release of that levy if you give them a current financial statement that is documented with your income expenses, pay stubs and bank statements for the last 3 months.
All tax returns must be filed and up to date.
With that information in hand, IRS will go ahead and propose one of three type a settlements with you.
IRS will either put you in an economic tax hardship, ask you to be entered into the installment  or payment program or let you know you could be a qualified candidate for an offer in compromise.
Should you have any questions regarding these three type of programs call us today and speak to us for initial free tax consultation.
 
Everything you need to know about a IRS Tax Levy – Former IRS Agents – Levy Relief