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Why is the IRS Levying My Paycheck, and Can I Make Them Stop?

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Why is the IRS Levying My Paycheck, and Can I Make Them Stop?

 

The IRS wants three things from you, communication, financial information, and compliance.  They really do not want to levy or garnish your paycheck.  A wage levy is what the IRS does after multiple attempts to communicate with you that have gone unanswered.

 

  1. Communication. The harder you make it for the IRS, the more they will work to get your attention.  The IRS gets your attention through IRS levies and IRS liens.  A levy includes wage garnishments, bank levies or asset seizures.  The IRS has sent a series of IRS notices (CP 501, CP 503, CP 504, CP 90 or Letter 11).  They want you to communicate with them to solve the problem.  When you do not respond, they feel like they must speak loader.  Louder in IRS Speak, usually means pain for you.  So, yes, the IRS wants to hear from you. They want to know that you have heard them and want to solve the problem. 

If an IRS Revenue Officer has called you or stopped by your house, he/she wants to hear back from you within a reasonable time. If you do not, be prepared to feel some pain in the form of a wage garnishment or bank levy.  They may be nice and just issue a tax lien, but that will not be the end of it. 

IRS collection employees have a job to do.  They are under pressure to get that job done as quickly and efficiently as possible.  By not responding, you are making their job harder. ALWAYS respond and let the IRS know you want to solve the problem, even if you cannot currently.

If fear is what is stopping you from communicating with the IRS, know that you do not have to talk to them if you are represented by a tax resolution specialist.

  1. Financial information. The IRS Collection Information Statement (Form 433-A, Form 433-F) tells the IRS your current financial circumstances.  Form 433-F is what the IRS Automated Collection Service uses.  An IRS Revenue Agent will us Form 433-A.  The Form 433-A or Form 433-F, tells the IRS your ability to pay or inability to pay them currently.  The IRS has a debt to collect but you may not have the ability to pay.  The IRS needs to know your financial circumstances, so they need the IRS Collection Information Statement to understand your ability to pay.  The IRS has a number of programs as part of the Fresh Start Initiative that can help if you have the inability to pay, such as a Partial Pay Installment Agreement, Currently Not Collectible (Status 53), Offer in Compromise or even Innocent Spouse.   Every solution starts with the completion of the IRS Collection Information Statement to show how much you can pay or to indicate a current economic hardship.   

The IRS will not know what option you qualify for if you do not communicate! Without financial information on how much you can – or cannot – repay, the IRS will take collection action to get you to act.

  1. Compliance. The IRS wants you in compliance!  Compliance means regularly filing required returns, and adequate withholdings.  If you owe back taxes, the IRS wants to know you will not be repeating the problem. That means paying your taxes going forward. If you are self-employed, the IRS will want to see that you are making required estimated payments. 

If you have unfiled tax returns, the IRS will need you to file the returns to be considered in compliance. For most people, that means the filing of the last six years’ returns. If you don’t have all of your W2s, or 1099s, you can obtain IRS transcripts.

If you were not comfortable with preparing the original returns and even more so with back tax returns, you may want to seek out a Certified Tax Resolution Specialist

Communication, financial information, and compliance will go a long way towards solving your IRS problems.  That is all the IRS wants – they want to hear from you, know your financial circumstances and to see you will pay and file your taxes going forward.

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