I met with a prospective client recently who was having their paycheck garnished by the IRS and didn’t know that it was coming. He was mad to say the least. Upon questioning him a little more, I found out that he had several years of unfiled income tax returns and had moved several times in the past three years.
The IRS is not required to track you down - though they probably could. The law just requires them to give you notice at your last known address and since he had moved several times since he filed his last tax return, the IRS obviously did not have his current address. If you have moved and haven’t updated your address recently you can send in the IRS Change of Address Form to make sure you receive notices from the IRS in the future.
Now, just because the IRS has started with a wage levy doesn’t mean that we have reached the end of the road. There are ways to get the wage levy reduced or stopped all-together. That’s for another post.
There are a lot of different types of problems that we encounter every day as we assist our clients with their IRS problems. They include: unfiled returns, filed but unpaid returns, payroll tax issues, trust fund recovery penalty issues, wage or bank garnishments, excessive penalties, IRS audits and more. No matter what your IRS problem is, there are ways you can work things out with the IRS. There are many different options and ways to resolve and help your IRS problems and each resolution will depend on your own personal financial situation. You can contact me through my contact form for more information about your IRS problem.
I don’t do a lot of posts like this, but every now and then maybe it’s helpful for a short commercial so you can see the big picture of what types of things we can help with and what your options are rather than the details of law, etc.
I wrote a short post a few months ago about how the federal stimulus package (i.e. rebate checks) would effect your IRS tax liabilities. Since then, I have received a number of queries on this IRS Problem Solving Blog about how the stimulus checks will be effected by an installment agreement you already have with the IRS.
As a brief review, an installment agreement is a contract (agreement) between the taxpayer and the IRS where the taxpayer agrees to pay a certain amount of money each month to the IRS in order to resolve their debt including penalties and interest.
While having an installment agreement set up may seem like you have “worked out” your tax problems with the IRS, the IRS does not look at it that way. In their eyes, you still have an outstanding balance due to them and therefore, they will keep the entire rebate that you are entitled to.
I have been away from my normal writing for the last couple of weeks. I apologize. I was taking a short vacation and then we have been spending a lot of time trying cases over the last few weeks. It seems like those trials come in spurts, and this time they all came at once.
I am looking forward to getting back to my normal schedule of writing very soon. If you have any questions you would like to have answered relating to IRS tax liabilities and how you can get out of trouble, I would encourage you to visit my "contact" page and shoot me an e-mail.
Thanks again for reading the blog!
I just released a new e-book titled, “Emergency Tactics to Stop the IRS from Taking Your Paycheck.” This is a great manual that will lead you step-by-step through the process of getting the IRS to release your wage levy immediately so you can get your life (and your paycheck) back to normal. Visit the product page to learn more about stopping your IRS wage garnishment and to get immediate access to this excellent resource as well as saving yourself a lot of money on professional fees.
QUESTION:
I set up an installment agreement a couple of weeks ago to pay off my tax liability. I understand that it is going to take a while before my taxes are paid in full, but I thought once I set up the installment agreement, the IRS cannot come and try to levy my wages. I just received an "Urgent" notice stating the IRS is going to levy my wages or bank accounts. HELP!
ANSWER:
You are correct. Once you have an installment agreement set up, as long as it is valid, the IRS cannot levy your wages. What I believe is going on in your case is that the IRS "machine" simply has not caught up with your installment agreement yet. You hear this a lot about organizations as large as the IRS - "the right hand doesn’t know what the left hand is doing." I think that is the case here. You have an installment agreement, but the computers that issues the levy notices and other collection notices do not seem to catch up for a few weeks.
You should feel at ease knowing that as long as you are making your payments on time and you are current the IRS cannot levy your wages. I would recommend that you send a letter back to the IRS office that sent you the collection notice and let them know you have already set up an installment agreement. Remember to always send correspondence to the IRS by Certified Mail, Return Receipt Requested. You should enclose a copy of the letter you received from the IRS confirming your installment agreement as proof. You can also call the 800 number on the notice and speak with someone at the IRS.
Finally, as a disclaimer, I need to do my ethical duty as an attorney and let you know that this blog is meant to provide general tax and legal information and not specific information for your particular situation. Before relying on any tax advice from this site, you should consult a competent tax professional to discuss the specifics of your case.