Jack Levy CPA & Accountant, Albany NY
Certified Tax Resolution Specialist
Call Us For Free Consultation For All Your Tax Problems,
Including Back Taxes, Payroll Taxes And Unfiled Returns.
 We Can Help You By Resolving your Wage Levy, Garnishments and Other Tax
Problems
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 subject to wage levies garnishment.
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. In general, payments received by you from a government agency cannot be garnished at the source. The wages that cannot be garnished include Social Security and 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. So you should check with someone who is experienced in the wage garnishment area if you are under garnishment from any state.
Where 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 garnishment is a great tax problem and requires immediate action
Garnishment is a great tax problem and the threat of a garnishment should be taken very seriously immediately. 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 or paycheck or notifying your customers that they should pay the I.R.S. and not you.
Clearly, the threat of wage garnishment is to be taken very seriously, indeed. Why did the I.R.S. garnish your wages or bank accounts? 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. 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 thing is to file any delinquent tax returns. If your records are missing or inadequate please refer to the page herein that deals with that topic. But 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 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 can help get your levy garnishment released.
Contact us for a free consultation on dealing with wage garnishment or any other of your tax
problems.
Contact us for a free consultation and we will help you with your tax problems,
back taxes or unfiled returns.
Do not represent yourself. As you won’t go to court without an attorney.
The I.R.S. is your adversary in these matters.
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