IRS Wage Garnishments Can be Stopped Immediately, Former IRS Agents
If you have received an IRS wage garnishment it is very possible to stop the IRS action within 24 hours. As a Former IRS agent I can tell you just follow my instruction.
You must have to give the IRS a current financial statement, the IRS form 433-f, along with all documentation to support the statement and be ready to send to the Internal Revenue Service. Also make sure all your tax returns are filed and up-to-date.
Call the number on the wage garnishment, usually a 1-800 number and IRS will review your financial statement and make it determination of how to close and settle your case.
After the IRS reviews your current financial statement they will make a determination on which method will be used to settle your case and release the IRS wage garnishment.
The Internal Revenue has very specific guidelines on how they will release your wage garnishment and settle your case and I highly recommend to any taxpayer to hire a true tax professional to make this a seamless process.
If you intend to contact IRS yourself, I also recommend you contact the Internal Revenue Service by phone and have your current financial statement on form 433-F along with all documentation including bank statements and pay stubs ready to fax to the Internal Revenue Service agent on the other line.
You must have all the documentation, if you are missing any supporting documentation IRS cannot close your case or release your wage garnishment.
The IRS financial statement form 433F
The Internal Revenue Service uses the financial statement to determine how taxpayers who will back taxes can close their cases with the IRS.
After IRS reviews your financial statement they will look to income and expenses to make their determinations on how they will proceed.
IRS will compare your income and expenses with that against the national and regionalized standard tests for expenses.
Closing Methods for Cases
1. If your expenses exceed your income IRS can place your case and to currently non-collectible which is basically a current economic tax hardship.
2. If you have more income than allowed expenses IRS will insist on a monthly installment payment plan.
3. Upon review IRS may determine you are an offer in compromise candidate or a tax debt settlement candidate. Before you wanting before you run off to try to settle your case you should fill out the pre-qualifier tool on our website to make sure you are in fact a qualified and suitable candidate to settle your tax debt.
How soon will IRS take your paycheck?
Employers generally have at least one full pay period after receiving a Form 668-W, Notice of Levy on Wages, Salary and Other Income before they are required to send any funds from their employee’s wages.
This allows the taxpayer to go ahead and get your wage garnishment released and their case settle with the Internal Revenue Service.
Introduction – What is Wage Garnishment by the IRS ?
An individual’s wages, salary, and other income can be levied.
Your wages, salary, and other income include payment for personal services in a work relationship.
So a wage garnishment is a seizure of an asset that belongs to a taxpayer or an entity that owes back taxes.
Can a 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. Do not let your employer bully you around like this. Contact an attorney if the threat is made.
Continuous Effect of Wage Garnishment Levy on Salary and Wages
Unlike other levies, a levy on a taxpayer’s wages and salary has a continuous effect.
It does not stop until the IRS releases the levy. You must react quickly.
A IRS Levy or Wage Garnishment 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.
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.
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.
IRS Wage Garnishment Levies
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.
Special Note
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 on a Wage 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.
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.
IRS Wage Garnishments on 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.
On Flagrant cases.
If And Then
The taxpayers are filing as married filing jointly Both taxpayers’ incomes are levied Only one of them can claim the standard deduction for figuring the exempt amount.
The taxpayers are filing with any other filing status Both taxpayers’ incomes are levied Both can claim the standard deduction for their filing status.
The taxpayers are remarried and filing as married filing jointly with the new spouses. Both taxpayers’ incomes are levied Both can claim the standard deduction for their filing status.
When both spouses’ incomes are levied, neither spouse can claim the other one as a personal exemption.
Taxpayers with More Than One Source of Income
IRS will consider income from all sources when a taxpayer has more than one income source.
Call us today and we can stop your IRS wage garnishment. We are the affordable professional tax firm.
Wage Garnishments Can be Stopped Immediately, Former IRS Agents