Our Richardson, TX tax firm frequently represents taxpayers in the DFW area, as well as other areas of Texas, who have had the IRS levy or garnish their wages through their employer. Because this can account for a substantial portion of a taxpayer’s paycheck, it can create chaos with their financial life.
When taxpayers with a payroll levy come to us, our first priority is to have the levy removed or to cease additional action. Once we’ve accomplished this, we assist those taxpayers in resolving the issue which caused the levy and bring an end to their problems permanently.
As opposed to Bank Levies which are one-time levies, where the IRS gets only one shot at the taxpayer’s bank account per levy action, when the IRS garnishes a taxpayer’s wages, it is a continuing levy. This means that the levy remains in place until it is released by the IRS.
How Do You Avoid a Levy From the IRS?
Before the IRS issues a Levy, several notices will be sent to the taxpayer. The easy answer on avoiding a levy, is that the taxpayer must RESPOND to the IRS, and attempt to work with the IRS to come to a solution. That might include amending a tax return if the amount of the tax is incorrect, or coming to a resolution with the IRS through a Payment Plan, Offer-In-Compromise, or being categorized as Currently Uncollectible.
To levy a taxpayer, the IRS must send a Final Notice of Intent to Levy (usually a LT 11) which also gives the taxpayer Collection Due Process (CDP) rights. To request these rights the Taxpayer must file Form 12153 within the timeline on the notice, which is 30 days. CDP rights include the right to an Appeal Hearing, and normally, puts collections on hold, until the case is heard. Even if the taxpayer owes the tax, this will give the taxpayer time to work with the IRS to find a solution.
Once Taxpayer’s Wages are Levied, what should the Taxpayer Do?
The actions that should be taken to address the problem include:
- Contact the IRS immediately to communicate their intention to resolve the issue and request that the IRS not complete the initial levy.
- Communicate that you will get in Compliance by filing any missing tax returns and making any estimated tax payments.
- Get the IRS any information needed such as a Form 433 (Financial Collection Form).
- Propose a plan to the IRS to resolve the tax issue. These resolutions include an Installment Agreement, an Offer-in-Compromise, or having the account placed in Currently Not Collectable Status.
Do you Need Help?
If you need help with IRS Levy Action or any other issues related to IRS tax debt, we can help you. To learn more about us, visit our website at https://jablonskyandassociates.com/.