When a person has an unpaid tax debt, there are many things that could be taken from them by the Internal Revenue Service. This includes their wages, as the IRS can levy wages in relation to tax delinquency. Today, we will go over some important things to know about IRS wage levies.
One is that the Internal Revenue Service typically can’t seize all of a person’s wages. Rather, a person is generally entitled to have a certain amount of their wages exempted from the wage levy. The standard deduction and the applicable personal exemptions are used in calculating the specific amount of the exemption.
As a note, if a person has multiple sources of income, there could be a chance that all of their wages from one particularly source could be seized in a wage levy, as the exemption they are entitled to might be allocated to a different income stream.
Also, the IRS can’t just issue a wage levy in any way and in any situation they want. As with other IRS tax collection mechanisms, there are various rules placed on the IRS when it comes to the use of wage levies.
Another thing it is important to note is that wage levies do eventually end; the IRS cannot simply have them go on forever. One thing that will trigger the end of a levy is the tax debt the levy is connected to being paid off. Also, there are certain things that could result in the levy ending before the debt is paid, such as the IRS agreeing to a levy release or an alternative payment arrangement being reached.
Having one’s wages seized by the IRS can leave a person very intimidated and wondering what they can do. When facing such a financially impactful situation, a taxpayer may want an experienced tax attorney’s help. Such attorneys can provide taxpayers with information on what the IRS can, and cannot, do with a wage levy and give them advice on actions that can be taken in response to such levies.
Source: Internal Revenue Service, “Information About Wage Levies,” Accessed Aug. 31, 2016