The tax professionals with Wall and Associates, Inc. work with businesses and individuals on a huge range of tax related matters. Their specialists frequently consult clients on back tax debt relief, wage levies, liens and other issues.
One frequent question related to tax issues comes down to earned wages. Clients often ask Wall and Associates specialists about whether or not wage garnishment can occur. They ask about the extent of such garnishments and when to expect them. While the details of each case may vary, it’s important for taxpayers to understand what to expect.
The question remains: can the IRS garnish wages if an individual fails to pay their taxes?
Understanding Wage Garnishment and Levies
The short answer is that the IRS has full legal authority to do employ all sorts of methods in order to collect tax debts. This could certainly include a wage garnishment, or even the seizure and selling of other assets to help satisfy the debt.
In IRS lingo, the process is known as a levy. According to the IRS, “A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt.”
Property can include both possessions as well as monetary funds that are promised to you (such as wages from an employer). The IRS breaks seizure rights into two categories:
1. Property you already own and hold
Property that is already owned and held is fairly straightforward. This includes items such as a home, a boat, a car, etc. The IRS can seize these assets and put them up for sale. The proceeds of this sale directly apply to pay off any outstanding tax debt.
2. Property which is held by someone else
Owned property held by someone else is a bit more unclear to people unfamiliar with tax codes. A key element of property held by another party is employment wages. Technically an employer still holds the property (a taxpayer’s wages). The IRS can directly apply asset seizure through a garnishment of those wages.
Additional property held by someone else may include the following, as noted by the IRS: “…retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions…”
When to Expect a Levy
Levies, asset seizures, and wage garnishments are among the most serious measures the IRS can take against individuals or businesses. Tax debt professionals like those at Wall and Associates, Inc. should be brought in long before a levy is put in place to come up with a customized plan to deal with these back tax issues. The truth is that the IRS proceeds through several steps, notices, and alerts prior to levying taxpayers.
Consulting With Tax Experts for Back Tax Issues
For many clients, tax issues can quickly become an escalating problem that only worsens over time. Much like other financial problems, these issues simply do not go away when you ignore them and bury your head in the sand. Until tax-related difficulties are remedied, they will only continue to worsen for taxpayers or business owners alike. And wage garnishment and other levies can become very real situations for those who continue to ignore or neglect notices from the IRS.
For people who feel overwhelmed or confused about their options, consulting with a professional is often the best course of action. Speaking with a tax expert can make options clearer in the concern and confusion of a back tax matter.
Look for experienced firms like the professional tax consultants at Wall and Associates, Inc. They have helped thousands of individuals and business start on the road to financial health, and they can help you, too.
Not a solicitation for legal services.