| The Internal Revenue Service (IRS) has an aggressive | | | | The IRS uses a formula to determine the percentage |
| collection tactic known as an IRS wage garnishment to | | | | of your wages to be withheld by your employer and |
| secure payment of back taxes. It is also called IRS | | | | sent to the IRS. The IRS considers your filing status |
| wage levy. | | | | and claimed exemptions into account, and then allots |
| If you owe taxes and despite having received Letter | | | | you a certain amount to live on from your own |
| 1058 - Final Notice of Intent to Levy and you have not | | | | paycheck. The remainder of your paycheck is taken |
| request for a Collection Due Process Hearing with 30 | | | | by the IRS through the wage garnishment levy to |
| days from the date of Letter 1058, the IRS has the | | | | settle your tax dues. |
| right to seize any real property or personal property | | | | Generally the levy is released by the IRS if (a) you pay |
| you own. Personal property includes categories such | | | | off your tax debt (b) the time for collection lapsed |
| as money held in bank accounts, savings or your | | | | before the levy is serviced (c) the release will enable |
| paycheck. IRS wage garnishments are considered | | | | you to pay off your tax debts (d) levy is causing you |
| personal property seizures. | | | | financial hardships (e) you enter into an offer in |
| If the IRS levies your wages, an Order to Withhold | | | | compromise or installment agreement with the IRS or |
| Notice is sent directly to your employer. Wages and | | | | (f) the fair market value of the asset levied is more |
| salary include fees, bonuses, and commissions. Once | | | | than your tax liability. |
| your employer receives an Order to Withhold from the | | | | You can appeal against the action of the IRS after the |
| IRS, your employer is required by law to withhold a | | | | levy under the Collection Appeals Program. The IRS |
| large percentage of each paycheck in accordance | | | | normally suspends collection action during the appeal. If |
| with the notice till your tax debt is cleared. If your | | | | your appeal is successful, the levy will be released. |
| employer refuses to withhold your wages or refuses | | | | Four Ways to Protect Yourself Against an IRS Wage |
| the wage garnishment, the IRS will hold them | | | | Garnishment |
| personally liable for any shortage that should have | | | | 1. When your offer in compromise is pending with the |
| been withheld from you and sent to the IRS An IRS | | | | IRS. |
| levy on wages and salary has a continuous effect and | | | | 2. When you have offered to pay your tax dues in an |
| attaches future paychecks, until the levy is released. | | | | Installment Agreement. |
| The levy on your wages will only end when the IRS | | | | 3. You are in bankruptcy. |
| releases the levy. | | | | 4. Your tax dues are barred by statute of limitation. |
| The IRS does not take all of your paycheck; they | | | | All of these could possibly shield you from protection if |
| allow you enough to live on - the standard deduction | | | | set up correctly. You can do all these things yourself, |
| amount and personal exemption amount based upon | | | | however most would agree it's much easier to hire a |
| your filing status and number of dependents. Any court | | | | professional in this matter. Since the IRS can be |
| ordered amount you need to pay as child support is | | | | intimidating, you should be made aware of your rights |
| exempt. However, the order must be before the date | | | | and have someone fighting on your side. |
| of the levy. | | | | |