Bank Levies, Wage Levies or Garnishments
When you owe the IRS money, every asset you own is at risk.
The agency takes extreme measures to collect what’s due to them. If you don’t make an effort to resolve your tax problem after the IRS notifies you of their intention to collect, one tactic they can use is a bank levy.
The agency instructs your bank to freeze your accounts and send them whatever funds you have to pay off your tax dept. Your cash flow immediately stops. And if your paychecks get direct-deposited in a bank account, that money is a risk of getting collected on, too.
A wage garnishment is another devastating weapon in the IRS’s collection arsenal. Once your employer receives a wage garnishment request, a large percentage of your paychecks goes direct to the IRS. Your employer must comply with the IRS request or suffer severe consequences.
Your situation becomes arguably more uncomfortable when you’re self-employed because your customers get notified of your tax debt. Like an employer, they get instructed to send their payments for your business direct to the IRS in what’s commonly called a â€śpayorâ€ť levy.
Of course, the IRS does leave you with some money. But in no way is it never enough to cover the expenses required to maintain your current quality of life.
Unfortunately, a wage levy against you stays until what you owe is paid off or you can negotiate another arrangement with the IRS, such as an Installment Agreement or Offer in Compromise. Getting placed in Currently Not Collectible status is an option, too.
As you might expect, approval for these solutions is more likely with help from an experienced tax attorney.
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