How It Is Possible for the IRS to Garnish Your Wages So Easily?

It’s a great feeling always when your payday is near and you are ecstatic to get your paycheck. But then, you see the check… and you’re in complete shock. You notice a major portion of your salary is missing! You run to the payroll department to learn what happened. You have been told that the IRS has garnished your salary and further, they inform that you will be left just a few hundred dollars for your expenses. I hear you ask yourself, how can they do this to me all of a sudden? The truth is, the Internal Revenue Service can easily garnish your wages and this article will explain the entire process that the IRS carries out during a wage garnishment. 

Before the IRS starts to take a major portion of one’s salary, they will send number of notices to the taxpayer which pre-warns them about their pending tax dues. You'll find different notices for each and every kind of tax issues. Say for example, you'll get one type of notice for failed tax return filing and another type for non-settlement of your tax payments. If it's an individual tax debt, form 1040 is used and business collection notices are related to an Employee Identification Number (EIN).

For those who do not meet their tax obligations or fail to reply to notices on time, a federal tax lien arises against the taxpayer under Internal Revenue Code 6321. The lien attaches to all the property and also property rights a taxpayer hold. One should note that this lien is not an IRS levy or garnishment. A lien isn't the actual seizure; instead, the lien provides the IRS the legal right to levy property.

Have you received a CP 504 Notice from the IRS? The letter will be cited as “Intent to Levy" and it gives a stern warning to taxpayers with pending dues. The Internal Revenue Service will wait for thirty days from the date of release of the letter and from then on, they have authority to levy your state tax refunds. This notice comes in certified postal mail.

With just the issuance of CP504 notice, the IRS cannot take collection action like wage garnishment. However if you get the Final Notice of Intent to Levy or CP90, it requires immediate attention from you because it is a very serious notice. Don't forget this is actually the last notice you will get and you'll be provided 30 days to respond to it. After that, the IRS is free to levy your wages and bank accounts. 

The IRS keeps a record of all your income details under Wage and Income transcript. It includes your savings account particulars, any 1099s from the prior year, interest income and also W-2s. With all this information, the IRS can easily send notices to all bank accounts, and to all your past and present employers to carry out levy on your income.

So the IRS not only takes money from your salary and bank accounts but additionally their actions affects your social standing too since that every levy they carry-out will be documented in county court house and this details can reach the general public easily. 

It is important to act right away if you get a levy before things get worse. Don't be fearful. Regardless of how big the tax problems you've got, it can be definitely resolved. Act quickly enough and there is a great chance we can get that IRS levy or wage garnishment released.