When the IRS (or State) has difficulty receiving payments from a taxpayer on outstanding tax liabilities, they can issue a wage levy or wage garnishment to your employer. This written notice instructs your employer to withhold a certain percentage of your paycheck and send it directly to the IRS instead. Your employer has no choice but to comply, and if you’re self-employed, your customers will have to pay the IRS instead of paying you! Because there’s a time limit on reversing levy action, don’t delay in getting help!
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The IRS uses this table to calculate how much of your salary is exempt from the wage levy. If you happen to receive a bonus while the IRS is garnishing your wages you won’t receive any of it because the IRS only allows you to keep that exempt portion of your salary.
If you are self-employed you’re not off the hook! The IRS will send a similar letter to your accounts receivable instructing them to send the money directly to the IRS instead – which means your customers now know you owe taxes! If you need wage garnishment help, you should act immediately. A few ways to release an IRS wage garnishment are:
- Proving an economic hardship created by the levy
- Setting up an Installment Agreement
- Paying the amount you owe
Wage levies are continuous. The IRS does not need to issue a new form for each period. The wage levy will continue until your taxes have been paid in full (including the penalties and interest) or you take action and stop the garnishment. Let us help you!