Wage Garnishment & Levy Laws
An IRS bank account levy and wage garnishment are two of the most severe enforcement actions. They allow the IRS to seize assets like your car, house, or wages, directly impacting your financial stability and daily life. Unlike a tax lien, which is a claim on your assets, a levy means the actual taking of property. This makes acting swiftly to resolve or contest the levy crucial.
Understanding Levies and Garnishments
IRS Wage Garnishment: This occurs when the IRS instructs your employer to redirect a portion of your paycheck directly to them for tax debt repayment. Additionally, the IRS can garnish 15% of Social Security benefits for unpaid taxes.
Bank Levy: This action allows the IRS to confiscate all funds in your bank account. The funds are held for 21 days before being sent to the IRS, offering a brief window to contest the levy on grounds of error or hardship or as a means to better facilitate tax collection.
Relief from a Tax Levy
The IRS must lift a levy if:
- The owed tax is paid, or the collection period expires.
- Levy release aids in tax collection.
- You’ve arranged a payment plan and are compliant.
- The levy prevents you from covering basic living expenses, creating economic hardship.
- The property’s value exceeds the debt, and releasing the levy won’t impede tax collection.
Economic Hardship Considerations
The IRS defines “economic hardship” as the inability to meet reasonable living expenses if a levy is satisfied. Factors include the taxpayer’s age, employment, living costs, extraordinary expenses, and any other relevant criteria affecting hardship.
Facilitating Tax Collection by Releasing the Levy
If you demonstrate that keeping the levy hinders the IRS’s ability to collect back taxes, it may be released. Showing that removing the levy would ultimately aid in settling the tax debt is key.
Legal Assistance for Levy and Garnishment Issues
Navigating bank levies and wage garnishments requires a nuanced understanding of tax law and IRS procedures. Todd Unger, Esq., specializes in providing immediate relief and strategic defense against IRS levies. He ensures your rights are protected and explores all possible avenues for levy release.
Get Legal Help
Facing an IRS levy or wage garnishment demands immediate action. Todd S. Unger, Esq., offers expert consultations for those dealing with these and other tax-related disputes in New Jersey and New York.
For a confidential consultation to explore your options and protect your assets, contact Todd S. Unger, Esq., today at (877) 544-4743.