What To Expect at A Wage Garnishment Hearing

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Knowing What to Expect Can Help You Prepare

No one relishes the thought of having their wages garnished for any reason. It is hard enough to get by in today’s economy without the stress of an even smaller paycheck due to garnished wages. At the same time, you do have recourse by filing for a hearing. A judge will evaluate your circumstances and either uphold the court order or levy, or he or she will overturn it based on inability to pay.

Steps To Take

In order to secure an exemption, you’ll need file a written petition for a hearing date. You’ll need to include the following details:

  • Your case number
  • You full legal name
  • Your formal petition requesting reduction or elimination of the garnishment
  • Exemption calculations

Once you file your written request with the court clerk, you’ll receive a notice stating whether or not your petition was granted, and if so, your hearing date. It is essential for you appear on the day and time assigned to you.

What You’ll Need to Bring

  • Proof of dependents and your exemptions
  • Paystubs
  • Receipts for any payments you may have already made
  • Proof of bankruptcy filing if your attorney has not yet notified the court of bankruptcy proceedings

At this stage, you must show the presiding judge you are filing for an exemption based on inability to pay, or if you are requesting a lesser garnishment from each paycheck. The judge will consider the following factors when evaluating your case:

  • Whether or not you have filed for bankruptcy
  • You have already paid the debt in full
  • Whether or  not you provide 50 percent of the support of any dependents in your household
  • Whether or not you are the primary earner and head of household
  • You have an existing payment agreement established with the creditor or tax agency, and that agreement is in good standing

If the judge rules in your favor, your garnishment can either be eliminated altogether or reduced to less than the customary 25 percent of your pay. If the judge rules against you, the wage garnishment will move forward as ordered.

If you are facing a garnishment hearing, it will be in your best interest to have legal representation. A qualified tax attorney will be able to assist you with tax-related wage garnishments or levies. Your attorney will see to it that you fully understand your rights, and will ensure your rights are upheld.

If you are facing a tax-related wage levy or garnishment, we have tax attorneys on staff to assist you. Get started today by either clicking on the white “start chat” button at the top of any of our webpages, or by giving us a call. Don’t go it alone. We can help.

 

Understanding IRS Collections, Part 2

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Life happens: kids get sick, the car breaks down, work hours get cut. Whatever money you had earmarked for paying your tax debt had to be shifted to cover a financial or medical emergency. If you’ve fallen behind on your taxes, chances are the IRS will come calling.

First and foremost, you have the right to dispute the amount of taxes you owe. You don’t have to blindly accept the amount shown on your IRS notice. You have 30 days to dispute the IRS’s findings and to request a meeting with an IRS agent. If you can prove that you owe a lesser amount (be ready to provide documentation supporting your claim), you may have some recourse.

The key is to not wait until the last minute to begin the dispute process. Initiate your dispute as soon as you receive any correspondence from the IRS. You can either call the number as stated on the notice, or contact the IRS by mail at the address provided on the letter. Follow all the instructions for filing a dispute; the letter will outline the steps you will need to take to initiate a dispute.

First and foremost, you have the right to legal/professional tax counsel. If you are unsure of how to advocate for yourself with the IRS or if you have any questions regarding any IRS correspondence you receive regarding your tax debt, you can hire a tax professional to represent you in negotiations with the IRS.

Tax attorneys and IRS Enrolled Agents have the authority to represent you in IRS negotiations and they can assess your current financial scenario and formulate a course of action. A tax professional can determine whether or not you are eligible for any of the IRS repayment programs such as an installment agreement, Offer In Compromise, or Currently Not Collectible status.

Your tax advisor can also make sure the IRS doesn’t violate your rights or try to intimidate you in any way.

Facing IRS collection action is similar to medical or credit card collections, but with one key difference: the IRS doesn’t need a court order to initiate wage garnishment or asset seizure activities. You will receive a Final Notice of Intent to Levy.

In the event you face IRS collection action, you need to respond quickly to any IRS notices you receive. A qualified tax professional can represent you and negotiate with the IRS on your behalf. If you feel you need a tax pro by your side, don’t put it off.

We have licensed tax attorneys and Enrolled Agents on staff to assist you. Get started today by clicking the white “Start Chat” button in the upper right-hand corner of your screen, or give us a call.

Don’t go it alone. We can help.

True or False? Get The Facts About Wage Garnishment

 

Photo:DodgertonSkillhaus
Photo:DodgertonSkillhaus

We’ve all heard those horror stories about the IRS randomly draining bank accounts, seizing houses and assets, and garnishing wages. Wage garnishment and asset seizure  just don’t happen on a whim; it is usually a measure of last resort for the IRS when all other means have failed. Here’s a look at some of the myths behind wage garnishment in particular.

1. I won’t receive any notice at all. Although the IRS isn’t legally obligated to inform you when they will begin garnishing wages, you will have received several notices from the IRS at this point. A Notice of Intent to Levy is issued beforehand, warning you of intent to levy income and assets if an outstanding tax debt isn’t paid or if payment arrangements haven’t been made.

2. My manager has to tell me if my wages are going to be garnished. Once your employer receives instructions to garnish your wages, they must comply immediately.  Your employer is under no legal obligation to let you know if/when your wages are being garnished.

3. The government has to allow enough room in my paycheck so I can cover my expenses. Unfortunately, the government doesn’t have to take your other expenses into consideration. As a rule of thumb, you can legally be left with $200 on each paycheck if you’re single or $300.00 if you’re married.

4. I can get fired if my wages are garnished. You’re safe if you have just one garnishment. However, if you have two garnishments, your employer can legally terminate you if they choose to.

5. I’m toast. I can’t stop wage garnishment from happening once I get a final notice. Good news. You have up to 30 days to respond to the final notice. If you haven’t done so already, now is the time to line up a qualified tax advisor who can review your case, determine your eligibility for repayment arrangements, and represent you in negotiating with the IRS and state tax boards.

Don’t wait until the last minute to respond. Contacting the IRS or state tax board can be nerve-wracking, but if you demonstrate a good faith effort to take care of your tax debt, that can go in your favor. Be proactive, contact the IRS or state tax board that issued the notice, and begin to put that chapter in your life behind you.

A qualified tax pro can help. Don’t go it alone. We have Enrolled Agents who can help. Get started today by clicking the white “Start Chat” button at the top of your screen.

 

Inside Scoop: The IRS CP523 Letter

David Playford/freeimages
David Playford/freeimages

You’re chipping away at your IRS Installment Agreement payments faithfully. Then the car breaks down and needs several hundred dollars in repairs. Shortly afterward, you get hit with the co-pay for your kid’s late-night ER visit. Your work hours suddenly get cut.

These things happen. Unfortunately, the IRS wants their money…now.

Here’s what can happen if you fall behind on your installment agreement, and fail to contact the IRS.

The CP523 Letter

The language of the CP523 letter is no joke. It informs you that unless you pay the full amount due (so much for the installment agreement), you run the risk of either a tax lien, asset seizure or both.

A good thing to keep in mind is this: the IRS issues the letter after you’ve missed several installment payments. If you miss one or two, you still might have a chance to salvage the installment agreement.

The IRS issues the CP523 when you haven’t contacted them to advise them of your change in circumstances. They assume you’re skipping out on the debt and they want to recover that debt…quickly.

If You Fall Behind…

Contact the IRS immediately. Don’t wait for the CP523 to land in your mailbox. By being proactive, you are demonstrating to Uncle Sam that you want to keep up with your installment payments.

If the thought of dealing with the IRS intimidates you, think about hiring a tax advisor. They deal with the IRS for a living and are able to effectively communicate with them on your behalf.

If You Get The Letter

At this stage you’ve missed several payments and have not contacted the IRS. The chances of salvaging your installment agreement are slim, but you should put forth the effort and contact the IRS at the phone number printed on the letter.

The IRS will give you 30 days to respond to the letter. Don’t wait 30 days to contact them. Do it now.

At this stage, you’ll need a good tax pro. They can negotiate with the IRS on your behalf, help you sort out your finances, and help you determine your next steps. If you’ve reached this point the IRS isn’t interested in playing nicely, so you’ll need someone on your side to represent you and to inform you of your rights…and to make sure the IRS respects those rights.

Falling behind on installment agreement payments can happen to anyone. Costly emergencies happen which can drain your finances and divert funds away from your installment payments.

If you receive the IRS CP523 letter, it’s important for you to take action right away in order to avoid getting hit with a tax lien or asset seizure. A qualified tax pro can help you sort out your options and to understand your rights.

Need a tax pro? We can help. We have Enrolled Agents and tax attorneys on staff who specialize in situations such as yours. They can negotiate with the IRS on your behalf, assess your options, and walk you through the process of dealing with the IRS.

Get started today by clicking the white “Start Chat” button or by giving us a call. Don’t go it alone. We can help.

What Is a CP504 Notice?

 

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If you’re struggling with a tax debt, chances are you’ve already received the CP 501 and CP 502 notices from the IRS. Both of those notices advised you of the total amount due, including interest and penalties. What if you blew off those notices, or put them in the “read later” pile? The IRS then issues the CP 504 notice, or Notice of Intent to Levy. It’s the IRS’s way of saying, “We mean business.”

The CP504 is only sent if you haven’t responded to any previous correspondence from the IRS regarding your tax debt, either by phone or by mail.  The IRS is essentially asking you to pay up or run the risk of asset levy or asset seizure.

Consequences of Ignoring the CP504

If you don’t respond to the CP504, the IRS can begin to take action against you in order to recover the money you owe to them. This can include:

  • Levying your state tax refund. If you will be getting a refund on your state income taxes, the IRS can seize that money in order to recover the money you owe them.
  • If your state tax refund isn’t enough to cover the balance owed and interest penalties, the IRS can place a federal tax lien on any profits you receive from selling a major asset such as land or a home. A federal tax lien is also considered a public record which will show on your credit report.

Other actions

The IRS can also seize bank accounts, investments, autos, RVs, and insurance policies in order to recover the debt you owe them. The IRS can also garnish your wages. In other words, ignoring a CP504 notice has serious long-term consequences that could jeopardize your financial well-being.

What You Can Do

Contact the IRS the day you get the notice in the mail. On the letter you’ll find a phone number for the IRS and any other contact information. Contact them immediately as a show of good faith that you’re working to resolve the tax debt.

If you disagree with the amount due, you can file an appeal. It may not resolve the debt altogether, but it does demonstrate that you are being proactive in resolving the debt.

Request an installment plan. There is no charge to set up an installment plan, but it is imperative that you make those payments on time without fail.

Better yet, get in touch with a qualified tax advisor who can inform you of your rights in dealing with the IRS. A qualified tax pro can also correspond with the IRS on your behalf, which is to your benefit if the thought of dealing with the IRS leaves you feeling intimidated or tongue-tied.

Your tax pro can also assess your financial situation to see if you would qualify for an installment plan, Offer In Compromise or any other abatement program. By understanding your rights and options, you and your tax pro can map out a strategy for addressing and eventually resolving your tax debt.

The IRS CP504 notice is sent after you don’t respond to any of their earlier notices. Ignoring a CP504 notice can result in result in asset seizure of levy as the IRS attempts to recover the debt you owe them.

If you receive a CP504 notice, don’t ignore it. Contact the IRS yourself, or enlist a qualified tax advisor to walk you through the process. We have Enrolled Agents and tax attorneys on staff to assist you in dealing with your outstanding tax debt and the IRS.

Why go it alone if you don’t have to? Get started today by clicking the white “Start Chat” button at the top right-hand corner or by giving us a call. Don’t let the IRS get the upper hand.

What You Need to Know About IRS Wage Garnishment

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freeimages.com

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.

Credit Impact

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
  • Mortgages
  • 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.