Stop IRS Wage Garnishments by Knowing the System
It is much easier than you think to stop an IRS wage garnishment.
The reality is, you just need to know the system. As former IRS agents and managers we know the system of how to immediately stop an IRS wage garnishment.
IRS is looking to close your case
The Internal Revenue Service manages billions of dollars in taxpayer debt each and every year.
Every billing case goes into the CADE 2 computer system and a systemically processed into bills and notices that are sent out to taxpayers. If you do not respond to their last and final notice the Internal Revenue Service must issue a IRS wage levy garnishment notice.
How to Stop the IRS Wage Levy Garnishment
To stop the IRS wage levy garnishment you need to contact the Internal Revenue Service and give them a fully documented IRS financial statement. That form is the 433-F.
You can find that form on our website.
By contacting the Internal Revenue Service with fully completed and document financial statement, the IRS will make a determination on how to best deal with you.
As a general rule, the Internal Revenue Service after a careful review of your financial statement will either place you into a tax hardship, insist on a monthly installment agreement or let you know that you could be eligible for an offer in compromise or tax debt settlement.
You can contact us today for a free tax evaluation and we can tell you how to stop your IRS wage garnishment levy immediately.
Remember, the key to stopping your IRS wage Levy garnishment is by immediately contacting the Internal Revenue Service and providing them with a current financial statement and have an exit strategy.
You must also know that you must have all your tax returns filed current with the Internal Revenue Service and they must be on the system.
If you have unfiled tax returns we can prepare those returns, send them to the Internal Revenue Service and finish the final negotiation to not only stop your IRS wage levy garnishment but settle your case.
The Law on IRS Wage Levy Garnishments
An individual’s wages, salary, and other income can be levied. Wages, salary, and other income include payment for personal services in a work relationship.
What happens if an 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.
You should 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.
The Continuous Effect of Levy on Salary and Wages, 668-W – Bad news for a taxpayer
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.
An IRS Example:
If a bank account is levied, it only reaches money in the account when the levy is served.
It does not reach money deposited later.
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.
Another IRS Example:
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.
The point to be made here is if you have continuous income coming in the IRS has a right to send a levy to the third party to collect that income.
IRS Example
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 of the IRS Wage Levy Garnishments
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.
Child Support
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 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.
How to Claim the Exempt Amount of the IRS Wage Levy Garnishment
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.
Please Note:
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.
Remember there is a very specific system to stop the IRS wage levy garnishment. You should never call the Internal Revenue Service without a plan or an exit strategy. If you’re going to use or higher any company make sure they have true tax professionals on staff.
