Wage Levy Answers – Understanding Taxes Video Vault

Wage Levy Answers

What do you do when the IRS hits you with a wage levy?

There’s never a good time to have the IRS garnish your paycheck.

An IRS wage garnishment is also called a wage levy. A wage levy is different than a bank levy in that it's continuous. Meaning that it stays in place until it's released or the liability is paid in full.

An IRS wage garnishment is also called a wage levy. A wage levy is different than a bank levy in that it’s continuous. Meaning that it stays in place until it’s released or the liability is paid in full.

When you get that notice, the first thing you need to do is get a copy from your employer. It’s called a form 668W and it’s a multipage form.

On the first page toward the bottom, there’s a place for you to list your dependents and your filing status.

Make sure you list your filing status and your dependents on the form and get it back to your employer right away.

It may take more than one pay period to get the IRS garnishment lifted. The more legitimate dependents you list on the form, the more income you’ll get in your next paycheck.

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The IRS must have issued a final notice of intent to levy. Plus send it to you via certified mail at least 30 days before the wage levy.

So, What Do You Do to Get an IRS Wage Levy Released?

This is one of the trickiest and most difficult situations I deal with as tax lawyer.

You have almost no leverage. There’s no time for planning. You’re left in a situation where you may have to agree to a bad deal just to get your wages flowing again.

You or your tax attorney will need to call the phone number on the wage levy notice. The IRS employee will want to go through your monthly income. They'll also go over your monthly allowable expenses. With that info they will to come up with the monthly disposable income.

You or your tax attorney will need to call the phone number on the wage levy notice. The IRS employee will want to go through your monthly income. They’ll also go over your monthly allowable expenses. With that info they will come up with the monthly disposable income.

They’ll want you to pay the monthly disposable income before they agree to release the wage levy.

This may not sound so bad at first. Until you realize the monthly amount is greater than your true ability to pay.

Sometimes you just have to agree and pay that amount until you can’t pay it anymore.

In the meantime, it’s a good idea to have some other collection alternative in mind.

Like an Offer in Compromise ready to send it once you can’t pay the ridiculous amount they demand you pay to release the wage levy.

If you can prove to the IRS that you have no monthly disposable income, you may be able to convince them to put you into hardship status.

This is the best way to get a wage levy released. But it depends on your financial circumstances.

Another Useful Tool in Getting a Wage Levy Released is Bankruptcy

If timing is right and all circumstances line up, bankruptcy can be a terrific solution to solving IRS problems, including wage levies.

Bankruptcy law states that the IRS wage levy must be released when a bankruptcy petition is filed.

Wage levies are brutal. They are a terrible thing to go through. If you can avoid it by being proactive that’s much better than waiting until a wage levy is filed against you. If you wait that long you will have depleted resources to help solve your IRS problem.

If you have questions about IRS wage levies call my office at 888-438-438-6474 and we can chat about it.

Enjoy the videos!

What Do I Do If I Get an IRS Wage Levy Garnishment?

How to obtain an IRS Wage Levy Release

Check Out My Other IRS Help Videos Too

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