Taxation & Estate Planning

Respond to an IRS Wage Levy Correctly

By Darrin Mish

An IRS wage levy is a very serious matter and potentially extremely debilitating.  It is also known as wage garnishment.  Technically speaking, an IRS wage levy authorizes the IRS to deduct up to about 75% of your monthly salary.  They will leave you with enough just for subsistence living, meaning you will only have enough for the bare necessities like food, a mortgage and child support.  The IRS will not consider any other financial obligations as vital to your daily life.  When slapped with an IRS wage levy, there are a few options that you have a right to.

To determine your rights and what you could do, you should engage a lawyer.  Often, the wage levy is the result of a battle of wills – yours and the IRS'.  Each of you believe that the other side is wrong.  But if things have gotten to this stage, it is best that you pay what you owe and then continue to fight for your rights afterwards. You should not jeopardize your credit standing or your way of life just to try to prove a point that may be hard to win.

A lawyer will tell you that you have a right to propose an Offer in Compromise.  The compromise process begins when the IRS has determined how much of your total debt they can expect you to pay off by the due date.  Then you should try to pay up that amount.

Another form of compromise is seeking to show that the wage levy will cause unreasonable hardship on your family.  If you can prove that it will stop you from paying life-saving medical bills or from taking care of a senior in your home, then the IRS can either reduce the amount deducted from your monthly salary or reduce your total tax debt.  This will only happen if these basic needs cannot be met.  The IRS would never agree to garnishing less from your salary if you cannot pay your credit card bills or your children's private tuition fees.

You also have the right to bring up any error in your tax bill, should one exist.  If you can justifiably show that some error has been committed in the amount of taxes you are charged, then you stand a chance of having your offer accepted.  In such a case, you will likely have your entire case re-evaluated and any levies will be stopped, at least for the time being.

Thus, one way to remove an IRS wage levy is to pay a mutually agreed amount in one lump sum.  The other alternative is to agree to a payment plan over a period of time, usually not more than 12 months.  This often works out for most people who need time to think of other ways to pay off the debt, even if they know they cannot afford a full year's worth of payments.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

Respond to an IRS Wage Levy Correctly is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on February 23, 2010 (boomark / email).