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When it comes to collecting tax debts, the IRS doesn’t mess around. The feared federal agency has several powerful tools at its disposal. Probably the most popular and effective one is tax garnishment. Defined as a type of administrative levy, tax garnishment is a favorite of the IRS because it is cheap and easy. To begin with, no court order is required. The IRS need only send a written Notice and Demand for Payment. Because tax debt is quite common in America, millions of these missives are delivered each year. If you do not respond to this notice, the IRS will send a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. You have just 30 days from the date on the letter before the levy process begins. Believe it not, the IRS is not required to place the envelope in your hand; they need simply deliver it to your last known address. As a result, many Americans who have moved or are on extended business trips may be unaware of a tax levy until their wages are garnished. Needless to say, this is a surprising and embarrassing situation for the tax debtor. How does wage garnishment work? The IRS has the legal right to seize the property of people who owe them money. They can levy (seize) your car, house, boat, etc. These items may then be sold at public auction, often for pennies on the dollar. Because it is a complicated and expensive process, the IRS does not like to levy personal property. In short, the IRS wants money, and the cheapest and easiest way for them to recover a tax debt is to garnish the wages of working people. Yes, an IRS agent can actually send a letter to your boss and tell him to withhold a certain portion of your paycheck and send it the IRS to satisfy a tax debt. Your employer is legally required to comply with all tax garnishment requests. In fact, your boss must actually help the IRS determine an appropriate tax levy by submitting your filing status, wages, and your number of claimed exceptions. While there is no set percentage, most tax garnishment plans involve weekly withholdings of about twenty-five percent, but they can get much worse. How to stop wage garnishment Once the IRS starts taking money out of your paycheck, they may not stop until your tax debt has been paid in full. The best defense against unwarranted or egregious tax garnishment is an experienced tax representative or tax advisor. A tax advisor, or tax representative, can review your case file an IRS collection appeal on your behalf if they believe the IRS made an error. These appeals are far more successful than most Americans think. According to the U.S. Government Accountability Office, about 41 percent of taxpayers who take their cases to the IRS’s appeals division win at least some relief. This could include a permanent release from wage garnishment or a reduction of total tax debt. At the very least, it may help stop IRS harassment. For more information about wage garnishment or to speak with a tax advisor visit http://www.txmstr.com.
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