The Tax Levy
The Tax Levy is probably the IRS’s most potent tool to deal with delinquent taxpayers. It quickly gets the Taxpayer’s attention and is the most common reason that new clients come to our Richardson, TX office. In prior blogs, we’ve discussed the Levy Process and what to do if you find yourself levied. In this installment of the IRS Levy series, we’ll take a look at what the IRS CAN NOT levy.
What the IRS Can’t Levy
Certain Property is Exempt from Levy. This Property includes –
- 85% of Unemployment Benefits (Meaning 15% is available for levy)
- 85% of Worker’s Compensation Payments
- 85% of Certain Public Assistance Payments including Social Security
- Certain Annuity and Pension Payments (will be covered in more depth in a future blog)
- Judgments for Support of Minor Children
- Certain Military Service-Connected Disability Payments
- Assistance under the Job Training Partnership Act
A Portion of wages are exempt. The amount exempt is based on the Taxpayer’s Filing Status and number of Dependents.
- The IRS provides a table that outlines this calculation for 2019 on their website at https://www.irs.gov/pub/irs-pdf/p1494.pdf
Keep in mind that the goal of the IRS is not necessarily to levy the taxpayer. The government is aware that not many people can live on the exempt portion of wages when levied. The government uses a Levy as a means to get the Taxpayer’s attention when the Taxpayer has not been willing to contact the IRS to find a solution to the delinquent tax debt.
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