Tag Archives: IRS

Remove Wage Garnishments With The Help of The Taxpayer Advocate Service

wage-garnishment

The IRS is the only collections authority that can take significant actions that will make it hard for you to live.  One such situation is when they start to garnish your paychecks. A wage garnishment is one of the most-feared IRS collections tactics, and rightly so. Your employer is legally obligated to implement it.  If they don’t, they can face stiff penalties themselves.

The bright side in these situations is that an IRS wage garnishment does NOT follow you to another job. So, if you have a wage levy in place and decide to quit your job in order to get out of it, we would encourage you to seek employment to get back on your feet. The IRS won’t know where to send another wage levy to an employer until some sort of tax return information gets filed. For example, when your employer issues you a W-2 after the end of the year, they are required to file a copy of it with the IRS.  When this happens the IRS will then know where you work and may file a new wage levy at your new employer.

So, if an IRS wage levy or wage garnishment is creating a significant economic hardship for you, you are encouraged to do one of two things. One is to seek professional tax representation to assist you in resolving the matter. If your tax situation is fairly complex, you’re going to want to hire professional tax representation to resolve your situation. If your tax situation is otherwise simple, or you simply cannot afford to hire professional tax relief assistance, then by all means contact your Local Taxpayer Advocate.

There is a Local Taxpayer Advocate (LTA) office in all 50 states and very large cities will have a dedicated office (ex. Cleveland and Cincinnati OH). Contact these folks and tell them your situation; it’s their job to help out folks such as yourself, and it’s a service already paid for by your tax dollars (nice how that works, right?). The nice thing about the Taxpayer Advocate service is that they are an independent arm of the IRS, and they function OUTSIDE of the normal bureaucracy of that agency. In fact, the Taxpayer Advocate service reports directly to Congress, NOT to the Commissioner of the Internal Revenue Service.

If you’re seeking assistance from the LTA, you will most likely want to file the following form, which is IRS Form 911, Request for Taxpayer Advocate Assistance. Your LTA can provide you with this form.

So, again, don’t let an IRS wage garnishment make you think that you can’t go get a job. The wage levy from your previous job does NOT automatically follow you over. Also, either seek professional tax resolution assistance from a reputable firm, or contact your local Taxpayer Advocate office to get help.

As always, ignoring your IRS problem does NOT make it go away. It is always best to confront the problem head on, get it resolved, and then move on with your life.  If you would like us to help you with your situation, please give us a call at 773.239.8850.

Requirements of IRS Installment Agreements

It’s not uncommon for taxpayers who owe the IRS to start to panic when they are faced with a sizable balance.  However, there are options if you can’t pay your balance all at once.  In this post, we outlined how to deal with the situation.  In it, we also discussed the IRS monthly payment plan referred to as an “Installment Agreement” or “IA” for short.  In this post, we’ll discuss what you need to do in order to set up an IA.

installment-agreement

The actual process of setting up an IA is pretty straightforward.  The challenging part is making sure you are compliant and that you actually meet a number of basic requirements. We assist our clients in meeting these requirements, and then negotiate the actual payment amount after it’s determined that you are eligible.

So without further ado, here are the requirements one must meet to be eligible for a payment plan:

  1. File any missing tax returns or substitute for returns (SFRs).
  2. Begin making current estimated tax payments (for self-employed people) or Federal Tax Deposits (payroll tax payments for businesses), if applicable.
  3. Disclose specific financial information, such as income, expenses, and assets.
  4. Demonstrate that you cannot pay off the tax debt from savings, a loan, or other means.
  5. If you owe less than $10,000 in tax, be able to pay off the entire debt in 3 years or less.  If you owe $50,000 or less, you get 5 years.  If you owe more than $50k, there is no time limit.
  6. Not have defaulted on another IA in the past 5 years.

So as you can see, the requirements aren’t all that challenging.  However, the most difficult part of this process for self-employed and small business taxpayers is #2 — finding the money to begin making payments on their CURRENT tax obligations. This involves some painful elimination of expenses and changing of priorities that most people don’t like, but it’s necessary. Remember, the IRS is the  most powerful creditor that we have and they can really make a mess of your life if you don’t work with them.  Thus, it’s best to get them taken care of, even if that means damaging vendor relationships, not paying other bills, etc.

If you’re eligible, then obtaining a payment plan is actually pretty straightforward. But as mentioned above, getting into current compliance is a critical first and second step, and is the most difficult part for most taxpayers.

Until next time…