Wage Levy: What Is It? Why Do You Need to Avoid It? Why Seek Help from Tax Crisis Institute to Handle It?

Are you aware that the IRS can ask your employer to hold a fraction of your wages as payment for unpaid taxes? What about your creditors? Are you aware that they can legally claim a part of your finances or assets as payment for outstanding debts? Well, this is what a wage levy, popularly known as wage garnishment, is all about. The employer may garnish anything between 10% and 60% of your earnings to cover what you owe the IRS or creditors.

Mostly, wage garnishment applies to unpaid taxes. However, it can also apply to debts like overdue hospital bills, defaulted student loan, and unpaid child support. Other than your wages, the employer can also garnish your bonuses, hourly commissions, and dividends. You should note, however, that the IRS doesn’t find bliss in garnishing your wages. No. They only consider it as the last resort when you show no intention of paying up or negotiating for a settlement.

Why Do You Need to Avoid a Wage Levy?

Since you and your family depend on your paycheck, it makes sense to try to avoid a wage levy. The first reason is that there’s always the chance that you may be left with almost nothing. For example, considering that the maximum garnishment limit for spouse garnishment is 60%, you’ll only be left with 40% of your pay if the deduction is made. It’s genuinely hard to make ends meet with 40% when you are used to 100%.

The other reason is that a garnishment also affects your dividends, bonuses, and commissions. A lot of times, it’s these add-ons that make the difference on your paycheck. Lastly, there’s the possibility of your property being garnished. If a levy is placed on your assets, it means that a part of your income is directed to the taxman. The worst part is that you don’t have the absolute right in the entire period that the levy is placed on your property.

What Are Your Options?

On your part, there are several things that you can do to avoid a wage levy. Here are the most practical options:

  1. Pay Up – If you have the means to pay what you owe the IRS or the creditors, just pay up. This does not just stop the levy but it also stops all interests and penalties attached to it. Additionally, it helps you to maintain the status of your credit record.
  2. Negotiate a Deal – You are allowed to talk to the IRS about a possible settlement plan. Options to consider here include an Offer in Compromise (OIC), an installment plan, and an extension. For an OIC, you’ll need professional help. In the case of an extension plan, you are allowed up to 4 months to pay up. It’s a good step if you can pay by the agreed deadline. If you can’t, then ask to pay in installment. You are normally given up to 6 years to clear the debt.
  3. Appeal the garnishment – Before a wage levy comes into effect, you are given up to 30 days from the time of receiving the last notice (the Intent to Levy). This is the time to make an appeal and ask for a legal hearing. It’s advisable to consult tax experts during such a time.
  4. Financial hardship – If you are genuinely facing financial struggle, then you should let the IRS know. This may be your only way of getting a reprieve. However, you have to convince the taxman that you are in dire financial need. You may have to provide financial statements and other records that may support your claim.

The Expert Factor: Why Seek Help from Tax Crisis Institute?

Wage garnishment is a complicated task and it’s only a wise thing to seek tax relief services when dealing with it. Speaking of tax relief, there’s no better option than talking to tax experts at Task Crisis Institute (TCI). This is more important if you can’t afford the highly-prices tax attorneys who are out there.

Since its founding, TCI has helped so many individuals keep their assets. They have been handling tax crisis issues for more than 30 years. So, in the case of a wage garnishment, they’ll help you keep your financial earnings. Wondering how you’ll benefit? Here are some ways that TCI can help when dealing with a wage levy:

  • Know Your Rights – Before the IRS can garnish your earnings, they must send two notices. The first one is to demand payment. In case you ignore this, they’ll send the second and last notice referred to as the Intent to Levy. It’s only after you ignore the last notice and 30 days pass that they’ll consider garnishing your wages. TCI experts will help you understand what your rights are in the entire process.
  • Quick fix – As already seen, you are expected to pay what you owe the IRS. This saves you from paying extra fees that they enforce as a penalty. A tax professional from TCI can assist you with this. They are able to help you work with quickness to avoid accumulating huge interest and to keep your credit record spotless. A lot of times, TCI helps to pay your debt quickly at a lower cost.
  • Compromise Services – TCI generally works on your behalf when it comes to negotiating with the IRS. In this case, they can negotiate for a Compromise in Offer Plan. This allows you to pay the taxman an amount that’s lower than what you owe. It takes a lot of negotiation to settle for this agreement.
  • Challenge the Garnishment – If you are convinced that an error was committed by the IRS and that you don’t have such debt, TCI can help you challenge the levy in court.
  • Financial freedom – Lastly, when a tax levy is stopped, you enjoy financial freedom. It allows you to have all your financial benefits back and in full. Thus, you don’t have to worry about the employer holding a part of your pay. Well, this is what TCI guarantees in the long run. They help you regain your financial footing.

Closing Thought:

No one likes a wage levy as it implies a deduction on your paycheck and probably assets. So, you just have to stop it. We’ve seen how you can do it and the importance of an expert factor. You should follow them to protect your earnings and assets. But still, patriotism is about being financially responsible and paying your debts accounts to financial responsibility.

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