Of all the scary notices issued by the IRS, a Notice of Intent to Levy is by far one of the most unsettling, especially when that levy involves your wages. IRS wage levy or garnishment involves grabbing a percentage of your paycheck until the debt is satisfied. Wage garnishment can be in place for as long as it takes for the debt to be cleared.
Is The IRS Playing Fair?
The IRS is required by law to provide written notice of intent to levy your wages and/or assets. You have the right to appeal this notice within 30 days. You can also file for an exemption in court.
The IRS cannot collect on a debt that is more than 10 years old. They also cannot collect if you are currently appealing the debt, or if you have filed for Bankruptcy protection.
You can also offer to settle the debt outright.
Seizure or Levy of Assets
If the garnished portion of your wages isn’t enough to satisfy the outstanding debt, the IRS has the option of levying other assets such as investments, bank accounts, cars, RVs, boats, real estate, inheritances and insurance in order to satisfy the debt.
Any IRS tax levy activity will be shown as a public record on your credit reports, and can be visible for seven years or more. Your credit score will take a hit, and you may have a hard time qualifying for any of the following:
- New car loans
- Rental housing
- Some categories of employment
- Credit cards
If you do manage to qualify for any kind of financing, the interest rate will be higher than for a consumer with a better credit score. You may also be subject to a larger deposit (such as for rental housing).
What You Can Do
As mentioned before, you do have the right to file an appeal and/or to seek an exemption in court.Whatever you do, don’t disregard the notice. Uncle Sam means business.
If you are facing wage garnishment, the IRS can attach a portion of your paycheck for as long as it takes to pay off the debt you owe. The IRS can also seize certain assets, in addition to any future tax refunds until the debt is satisfied. Your credit rating will suffer.
This is one of those instances where a qualified tax advisor can save you time, money and emotional distress. Don’t wait until the last minute to reach out. We help distressed taxpayers address such crises as wage garnishment and/or asset seizure.
Get started today by clicking the white “Start Chat” button in the upper right-hand corner of any of our webpages. Don’t face a tax crisis alone. We can help.