IRS Wage Levy
So, you’ve owed back taxes for a number of years and disregarded the letters from the IRS. You go to pick up your pay check and it is seriously smaller than usual. Welcome to the IRS wage levy.
IRS Wage Levy
If you fail to pay taxes to the federal government, the collections unit known as the IRS will come calling. If you are a salaried employee, the IRS will often purse an IRS wage levy.
A wage levy is a nasty little tool because it effectively gives the IRS a means to collect taxes notwithstanding your personal situation. Depending on what you owe, the levy can be for as much as 70 percent of your gross paycheck. Importantly, the levy is served by the IRS on your employer and goes into effect immediately. Your employer has no choice but to subtract an IRS determined percentage from your gross earning and send it to the IRS. You can complain and/or beg all you want, but the employer must comply.
Need Help with IRS Problems?
Click Here To Talk to a Tax Professional
Fortunately, the IRS wage levy is used primarily as a means of getting your attention. The IRS is willing to talk with you and work out other payment options. You should not, however, speak with the IRS directly. Everything you say can be used against you as evidence. Instead, you have the right to get a tax representative to speak to the IRS on your behalf. Nothing they say can be used against you and they can keep the IRS from trampling on your rights. We do not provide such services, but you can see listings in the top right of this page for such services.
Once you have a professional representing you, they will contact the IRS to negotiate the release of the IRS wage levy. Since the IRS is primarily interested in getting you back into the system and consistently paying taxes, the agency will often work out deals. Depending on your situation, this can include any of the following results:
- A payment plan and release of the IRS wage levy.
- A reduction of the tax owed, payment plan and release of levy.
- A determination the taxes are uncollectible and termination of levy.
- A reduction of the percentage used for the IRS wage levy.
- A determination of innocent spouse, termination of levy and tax owed.
- An offer in compromise, release of levy and major reduction of tax owed.
Again, the specific result will depend on your circumstances and what you owe the IRS. The key in handling an IRS wage levy is to take action. Get a professional representative and let them do their job. Whatever the result, it will be far better than losing up to 70 percent of your paycheck.