IRS wage levies often cause immediate financial damage, but there are ways to help and there is even hope to get them reversed! A wage garnishment or IRS wage levy is simply a written notification from the IRS requiring a non-payer or employer to withhold a portion of an employees regular paycheck and to contribute it to the IRS. Wage garnishments may be used for many reasons, but are most often used in civil cases and for tax debt relief. Wage garnishments can also be used for tax liens and many other types of federal tax disputes. It is important for employers to be aware that IRS wage levies are not only a way to collect overdue taxes from hardworking Americans, but it is a very effective tool in the collection. The process by which employers receive notification of an IRS wage levy begins by sending a letter to the liable party providing notice of the liability. If the parties do not settle their differences prior to the due date then a payment plan will be established through the IRS for an affordable repayment plan. If an agreement cannot be reached, both sides are required to appear in federal court to determine a solution.

If wage levies are being requested due to back taxes, the IRS will send a Demand for Inflation Prevention. This document provides the taxpayers with options to avoid having their wages garnished. If the wage garnishments continue beyond the date specified in the demand then the liable party may be ordered to repay all or a part of the back taxes. Many taxpayers believe that if they are working for another company they cannot be asked to repay taxes or face wage levies. This is not true. The IRS has the right to ask employers to comply with their policies regarding tax collection and payment. In fact, if the employer does not comply with the policy and notice is received, the employer may be subjected to fines or penalties. If a company refuses to comply with the order to repay taxes, the IRS will notify the employer of the financial responsibility of the situation and will issue a tax levy.

Avoiding Irs Wage Levies

To avoid wage levies the best strategy is communication. Communicate with your employer how you discovered the information and how you plan to proceed. You also need to ensure that you fully understand all of your rights as a worker and that you understand how to properly file your return. Proper procedures must be followed when you are preparing your yearly return or when you go out of town for vacation. Your employer should have the proper procedures in place and you need to ensure that they are followed or you could be facing wage garnishment. Wage levies can be a deterrent to getting a tax lien released. Wage liens cannot be released until the IRS gets the taxes that you owe. Wage levies are usually filed through the tax debt settlement process. The IRS is prepared to negotiate with taxpayers to resolve these types of issues. Taxpayers should work with an experienced tax lawyer to address their needs.