Stop IRS Wage Garnishment Now

Sometimes an employer threatens to fire an employee to avoid handling a levy.

This might be a violation of the law (15 USC 1674).

If the employer fires the taxpayer because of wage garnishment, 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). The DOL — not the IRS — must decide if the employer violated the law.

Unlike other IRS tax levies, a levy on a taxpayer’s wages and salary has a continuous effect. It attached 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.

Examples:

If a bank account is levied, the levy only extends to money in the account when the levy is served. It does not extend to money deposited later.

When other income is levied, the levy extends to 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 extends to 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.

Another 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.

Part of the individual taxpayer’s wages, salary, and other income is exempt from levy. This includes fees, bonuses, commissions, and similar items, as well as retirement and benefit income.

The weekly exempt amount is:

The total of the taxpayer’s standard deduction and the amount deductible for exemptions on an individual ncome 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.

Please take Note:

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 cannot be claimed as an exemption for figuring the exempt amount. (See IRM 5.11.5.4 (2) and IRC 6334(d)).

IRS will not remove any Wage Levy until all tax returns are filed.

If you do not have your records, we can secure all your information from the IRS to prepare all back years. Joshua A. Webskowski, EA, USTCP can make this happen within days.

Even though IRS has sent a wage garnishment or Wage Levy to your employer, there are certain allowances that the IRS will give to you.

A chart will be sent to your employer that they can use to determine how much you are allowed to keep from your paycheck. The amount allowed is for your basic food monies only. For example, a single taxpayer with one exemption was allowed $179.81 per week in 2009, and the IRS will take the rest.

The IRS has sent a Wage Levy or wage garnishment out because a taxpayer did not respond to correspondence from the IRS. The IRS always makes several attempts to contact a taxpayer that owes tax, because they are required to, by law.

Some taxpayers may not receive this information because they have moved, or did not actually receive the mailing sent out by IRS. It makes no difference. Once an IRS Notice of Levy has been sent, they will not be removed until contact has been made with the Internal Revenue Service. Joshua A. Webskowski, EA, USTCP can handle the IRS for you.