Wage Garnishment

A garnishment and a levy are the same thing. The terms are used interchangeably in respect to the seizure of assets by the IRS.

Assets are subject to wage garnishments and levies.

Both are enforced collections of money owed. A wage garnishment or levy may be against any asset in the enforcement of tax collections. Most commonly bank accounts and accrued salaries and wages are the targets of garnishments; nevertheless, the term may be applied to the legal seizure of any asset including furniture and fixtures, machinery, autos and boats or any other assets that could be garnished. Tools of the trade are protected from garnishments up to a value of $3,390. (If you own cows or chickens you can keep up to $6,780!)

Your bank account is a prime target for garnishment.

When your bank is account is subjected to levy, the I.R.S. may take whatever money it finds, regardless of where it comes from.

Funds in your bank account are said to be fungible; that is, they lose their character once deposited. When your bank is account is subjected to levy, the I.R.S. may take whatever money it finds, regardless of where it comes from. In general, payments received by you from a government agency cannot be garnished at the source. The wages that cannot be garnished include Railroad Retirement benefits, Workers' Compensation, court ordered payments you may receive for child support and alimony, military disability and some other payments. Nevertheless, there are exceptions and tax agencies may levy garnish at the source.

However, once those funds are deposited in your bank account, they lose their identity and can be seized by the I.R.S. by levy.

A wage garnishment stays in effect until the tax is paid in full or until the I.R.S. agrees to release the levy.

Once a levy has been effected against your bank account, the I.R.S. cannot garnish your bank account again without repeating the notification process. This is not always true for state garnishments. Massachusetts, for one, issues garnishments that are good for any funds deposited into the account over a six month period.

You should check with Tax Network USA to see if you are under garnishment from any state.

When your accrued salary or wages is the target, the wage garnishment is perpetual. Once the garnishment of wages is in place, it will stay in place until the tax is totally paid or the wage garnishment is released for some other reason.

Wage garnishments are severe tax problems and require immediate action!

Wage garnishments are severe tax problems and the threat of a garnishment should be taken very seriously. If you have received any document from the I.R.S. that uses the word 'levy' or ‘garnishment’ you should be aware that the agency is only days away from seizing your bank account, paycheck or notifying your customers that they should pay the I.R.S. and not you.

If you are a single mother of two children claiming head of household status and being paid every two weeks, you will receive merely $632.69 or $16,500 on an annual basis! That amount is to pay the rent and feed and clothe yourself and your children!

Clearly, the threat of wage garnishment is to be taken very seriously.

There are several reasons why the I.R.S. or a state would seize your assets through a garnishment.

Either you have not paid an outstanding tax obligation, you have not filed all your tax returns or you have defaulted on child support or some other mandatory obligation.

What can you do if the I.R.S. imposes a garnishment on your bank accounts or your wages?

The first step to take when you receive an I.R.S. Notice of Intent to Levy is to contact us at Tax Network USA.

We will contact the tax agency to obtain its records of taxes owed and returns required to be filed and income records of W2's and 1099's filed in your name. The next step is to file any delinquent tax returns. You must file all required returns.

Then, you are in a position to determine your tax liability for all years, at which point you have five alternatives for getting a levy released: first, pay the tax immediately; second, pay the tax in installments; third, submit an Offer in Compromise; fourth, get placed in non-collectible status or fifth and last, enter bankruptcy.

Generally, the quickest way to get a garnishment removed is to pay the tax or negotiate an installment plan, which for amounts less than $25,000 is fairly easy for us to arrange. For an amount greater than $25,000, the I.R.S. will require disclosure of your financial condition of Form 433 A, 433 B, or 433 F and that process can be complicated and time consuming. We do not recommend you take this task on yourself, as you are not familiar with the most up-to-date tax codes and regulations to help during a mediation.

We can help get your levy garnishment released.

While we have attempted here to explain clearly and concisely the wage levy or wage garnishment process, we cannot set out all the fine points here. We at Tax Network USA specialize in this area of tax administration and we encourage you to email us or call us at our toll free number for a free consultation on your garnishment problem.

You Have the Right to Tax Representation

If you have been contacted by the IRS or your state's Department of Taxation, or have received tax liens, levies or notices of IRS intention to do so, contact us at 888-466-4706 or fill out our online form without delay for a free confidential initial tax consultation.