Wage Levy (Wage Garnishment)

Wage Levy (Wage Garnishment)

In the case of an IRS levy, your property can be legally seized to satisfy a tax debt that has been incurred. The court can order the garnishment of your wages, liquidating your bank or financial accounts, and the seizure or sale of your property.

Tax levies are authorized to collect delinquent taxes under section 6331 of the Internal Revenue Code (IRC). 

In the event that you receive a Notice of Levy for your account from your financial institution, you have 21 days to respond to the notice. Your accounts will then be drained, and the money will be forwarded to the IRS so that it can be recovered. The levy may be revoked if you act immediately, so please contact us as soon as possible.

Our combined efforts will enable us to compile and forward the IRS the required information they require in order to release the levy. In addition, we will ensure that the best possible payment arrangement for you is negotiated according to the law and your finances.

woman concerned about wage garnishment
There are four requirements that must be met in order for the IRS to levy:
  • You have been sent a Notice & Demand for Payment from the IRS informing you that the tax has been assessed;
  • There has been a neglect of or refusal by you to pay the tax;
  • At least 30 days prior to the levy date, the IRS sent you a Notice of Intent to Levy and a Notice of Your Right to a Hearing There are three ways the IRS can provide you with this notice, they may give it to you in person, they may leave it at your home or regular place of business, or they may send it to your last known address by certified mail. Your state tax refund may be levied by the IRS and you may receive a Notice of Levy on Your State Tax Refund and a Notice of Your Right to Hear.
  • You received an advance notice from the IRS informing you that your tax liability may be determined or collected and that third parties may be contacted as part of the collection process.
When the IRS levies your wages, a portion of your them will be sent to the IRS each time you get paid until you are able to:
  • To pay overdue taxes, you make other arrangements,
  • Tax arrears have been paid, or
  • Release of the levy.

Some of your wages could be exempt! During the levy year, the exempt amount is calculated based on the standard deduction, and the “amount determined” is calculated in part by the number of dependents you may have.

With the levy, the IRS mails publication 1494 explaining how to determine which amounts are exempt. Within three days, your employer will send you a Statement of Dependents and Filing Status. If you don’t return the statement within three days, your exempt amount is figured as if you are married and filing separately without dependents. If you have other jobs or sources of income, the Internal Revenue Service may allocate the exemptions to them and levy 100% of their income.

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