IRS Levy Release
The IRS is adept at taking money from paychecks via wage garnishment and bank accounts for taxes owed the Government via bank levy. An employer is required to collect the majority of a taxpayer’s check and forward it to the IRS if it has received a notice of wage garnishment. The amount taken from the paycheck is often 30% to 75% of the taxpayer’s wages. Banks, if properly notified, must send the entire amount in your bank account 21 days after receipt of the collection notice.
These garnishments and levies do not stop until the tax is paid or until it is modified or released.
The levy or garnishment will occur if the tax has been assessed (entered into the books as a debt), the taxpayer has been sent a notice of the debt and demand for payment, he or she doesn’t pay, and the taxpayer has received a final notice of the IRS intent to levy and a right to a hearing at least 30 days before the levy actually occurs and to the taxpayer’s last known address.
The collection can be appealed via the collection due process appeal process on a number of bases:
- No opportunity to dispute the underlying debt
- Spousal defense
- Alternate collection options
- Statute of limitations expiration
- The IRS assessed the debt and sent the levy notice while taxpayer in bankruptcy
- The tax has been paid
- Procedural assessment error exists
If the taxpayer misses the deadline to request a collection due process appeal hearing the IRS will still release the levy if:
- The debt is paid
- The time has expired for collection of the debt “ Statute of Limitations Defense
- An alternate legal alternative is negotiated like an installment agreement, non collectible status and the taxpayer is compliant or has filed all tax returns.
- A hardship exists and the taxpayer is non collectible and hasn’t filed all returns
- A bankruptcy is filed
It is important that you read our tax blog about levy and garnishment issues and then call to discuss your situation. If you have outstanding tax debt and/or are being levied or garnished, an Arizona Tax Attorney can help you stop it and deal with the debt.
generally by the IRS when they know they owe, and they know the IRS is on the way.