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A wage garnishment or wage levy is a legal seizure of property. It is an effective method of tax collection used by both the IRS and many States. The IRS or States will issue a wage garnishment to seize all or part of a taxpayer’s wages if a taxpayer does not respond to collection letters or fails to live up to an agreement to re-pay back taxes. A wage garnishment does not take the taxpayer’s financial situation into account and is often thought of by collection agents more as an “attention getter” than a true resolution to a tax problem.
The information below contains information about the various collection procedures used by the IRS and State tax agencies to collect outstanding tax debts.
We Can Help with Overdue Payroll Taxes
Employers are required to withhold payroll taxes from their employees' paychecks and pay this tax to the IRS on their employees' behalf. The most common types of Payroll taxes are 941 taxes and 940 taxes. When business owners are unable to or avoid paying these taxes, a payroll tax liability is created.
Stop IRS Collections
The IRS will put a taxpayer into Uncollectable Status if they can demonstrate that they do not currently have the ability to pay back their tax debt. This status is also frequently referred to as "Currently Not Collectable" or CNC.
We have a client who had to close down his business due to financial difficulties. Unfortunately he ended up owing taxes to all of California's tax agencies - FTB, EDD and BOE. The amounts to FTB and BOE are relatively small (under $4000 each) compared to the EDD debt which is now over $12,000.
Wage garnishment is a legal process in which some percentage of your earning’s are withheld by an employer for the re-payment of debt undertaken by you. Nowadays most of the wage garnishments are being made by court’s order. Many other wage assignment exist which are completely legal and are being used by state tax collection agency and IRS for the purpose of collection of unpaid taxes and there are federal agency administrative garnishments for collection of non-tax debts owed to the federal government.