THE EFFECTS OF A WAGE GARNISHMENT ON YOUR CREDIT REPORT - TAX RELIEF

When you owe money to a creditor, that person or company has the right to pursue the debt through a variety of methods. It can send you letters or make phone calls to your home to demand payment on the account. It can also ask a judge to have your wages or salary garnished until the debt is paid in full.

When your income is garnished, it does more than leave you short of money in your paychecks. A wage garnishment also becomes a matter of public record. More importantly, it can and often does inflict long-lasting damages to your credit report and finances that could take years to resolve until your debt is paid off entirely.

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DEBT AND WAGE GARNISHMENT

Garnishments are used to collect on a variety of different debts. A municipal, state, or federal judge may allow garnishment of your income if you owe:

Unpaid medical bills
A defaulted bank loan
A defaulted payday loan or cash advance
Delinquent car financing
Unpaid rent
Eviction court costs
You may also be garnished for unpaid unsecured credit card bills. However, rather than pursue a garnishment, many unsecured credit card companies instead will ask the judge to levy your bank account. The levy will remain in place until your unsecured debt is satisfied.

If you owe debts like unpaid student loans, delinquent child support payments, or unpaid taxes, your wages can be garnished without a court order. The government often bypasses the legal system and instead begins garnishing your wages automatically.

Many times, the percentage that is garnished is more than what would be allowed with other creditors like banks or hospitals. The government can also levy your future tax refunds until your obligation is paid in full.

WAGE GARNISHMENT PUBLIC RECORD REPORTING

Wage garnishments negatively impact your credit report and credit score. However, creditors themselves do not typically report their decision to garnish your wages to credit agencies.

Instead, they will report your accounts as being defaulted or closed. They will not indicate that the account was collected through garnishment or other forms of payment.

However, the garnishment will show up on your record through public records, which are accessible to anyone who searches for them. Whenever you are taken to court and an order is given to garnish your wages, that order becomes a matter of public record. Credit agencies can easily find and use that information to lower your credit score and mark your credit report.

In fact, an entire section of your credit report is devoted to the recording of public records. This information is accessible to banks and other financiers. It generally stays on your record for up to seven years and can lower your score up to 150 points per entry.

This lowered score impacts you in negative ways like when you go to apply for a loan or a new apartment. Anyone doing a credit check on you will find this information and possibly deny your application because of it.

Even so, garnishment is often used as a last resort to get you to pay off your debt. You may still have time to cure your defaulted accounts and protect your credit score by knowing what preventative steps to take first.

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Curing Defaulted Accounts
Most creditors are typically happy to work with you when it comes to curing a defaulted account. In fact, going to court and pursuing a garnishment is time consuming and expensive. Most companies would rather avoid this effort and instead work with you to help you pay off what you owe.

With that, you may want to consider asking the creditor for a repayment plan that is affordable and reasonable to which you can commit. Ask the creditor to establish payments that you can easily pay off each month. Also ask for a date each month that you can abide by without having to change it to avoid defaulting on the repayment plan.

If you take this first step, you may find that you can protect your credit report and score and also keep your debts out of the public records. You also avoid having your wages garnished.

Student Loan Debt
Curing a defaulted student loan debt also can benefit you in crucial ways. If you default on a student loan, the financier can have your wages garnished for years at a time. The payments will be taken out of your earnings automatically each month, which could result in you experiencing financial difficulties until the amount is paid in full.

Instead, you can contact your student loan company and ask to be set up on an installment arrangement that lets you make affordable payments each month. The payments can be taken automatically from your bank account each month.

As long as you make the payments on time, you may avoid having your wages garnished and your debt becoming a matter of public record. You also rebuild your credit score over time in a responsible manner.

PREVENTING AND ADDRESSING A WAGE GARNISHMENT

When you want to avoid having your wages garnished for any type of debt, it is critical that you prevent your debts from reaching a point of default. You should make it a point to pay off your debts in full each month or make payments on them in a responsible and timely manner.

Even after your defaulted debts are paid off in full, they may still remain on your credit report. Some stay on there for up to seven years to 10 years. A tax lien can stay on your credit report for 15 years.

Even if you are being garnished, you still may want to use every method available to you to pay off the debt. You can use any money left over in your paycheck to put toward the debt, for example. You also can sell assets like an extra car or jewelry to put toward the amount that you owe. The sooner that you pay off the obligation, the sooner the creditor will release the garnishment.

After the garnishment is released, you should do your best to stay on top of your finances and avoid going back into debt. You should also save money to put toward deposits on rental housing or new financing for a car. Having money for deposit along with proof that your debts have been paid in full could help you secure a loan or be approved for new housing.

A wage garnishment can negatively impact your life in a number of critical ways. Along with taking much needed money out of your paychecks, it also lowers your credit score. When you want to avoid being garnished, it is important that you cure defaulted accounts immediately. You may spare your credit report and make sure your debt does not become a matter of public record.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.


Advance Tax Relief is a Professional Tax Relief Organization

WHAT IS THE IRS FAILURE TO FILE PENALTY? THE BASICS - ADVANCE TAX RELIEF

Definition

A failure to file penalty is charged on returns filed after the due date or extended due date, absent a reasonable cause for filing late.

The combined penalty is 5% (4.5% late filing and 0.5% late payment) for each month or part of a month that your return was late, up to 25%.

The late filing penalty applies to the tax that remains unpaid after the due date. Unpaid tax is the total tax shown on your return reduced by amounts paid through withholding, estimated tax payments, and allowed refundable credits.

DO YOU NEED IRS TAX HELP?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ Rated

Call (713)300-3965

***We have successfully resolved millions in back taxes for our clients

If after five months you still haven’t paid, the failure to file penalty will max out, but the failure to pay penalty continues until the tax is paid, up to 25%.

The maximum total penalty for failure to file and pay is 47.5% (22.5% late filing and 25% late payment) of the tax.

However, if your return was over 60 days late, the minimum failure to file penalty is the smaller of $205 or 100% of the tax required to be shown on the return.

Even if you can’t pay all the taxes you owe, you should still file your tax return by the due date. The penalty for failing to file your tax return is 10 times as much as the penalty for failing to pay.

To have a penalty removed (abated), you’ll need to call or write the IRS. You may be able to get a penalty removed simply because you haven’t had any IRS penalties charged in the last three years. This option, known as first-time abatement, is available for failure to file and failure to pay penalties.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.

Advance Tax Relief is a Professional Tax Relief Organization

BEFORE PAYING IRS PENALTIES FIRST LOOK INTO PENALTY RELIEF - EXPERIENCED TAX LAWYERS

The IRS doesn’t abate the vast majority of penalties. Why? Probably because people don’t know to ask for penalty relief – or it may seem lik­e it’s not worth the time or effort. Here’s why it is worth it.

The IRS uses penalties to encourage us to follow the rules and remain in compliance – and it uses them a lot. Each year, the IRS assesses tens of millions of penalties totaling billions of dollars. But the IRS also provides several options to get penalties removed, or abated, for people who qualify.


DO YOU NEED IRS TAX HELP?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ Rated
Call (713)300-3965

***We have successfully resolved millions in back taxes for our clients

The most common IRS penalties are for not filing and not paying
There are almost 150 penalties in the Internal Revenue Code, but a few common penalties make up 74% of all penalties. The most common penalties are:

Failure to pay penalty – 56% of all penalties, imposed if you don’t pay taxes on time
Failure to file penalty – 14% of all penalties, imposed if you don’t file a return on time
Failure to deposit penalty – 4% of all penalties, imposed if a business doesn’t pay employment taxes on time, or pays them incorrectly
A frequently encountered nuisance penalty is the late-filing penalty for partnerships and S corporations. The estimated tax penalty is another common penalty that taxpayers often dispute by providing an exception when filing the tax return.

Reasons the IRS will remove penalties
You can request penalty abatement for the most common penalties using four reasons:

1. Statutory exception: proving a specific authoritative exclusion to the penalty
Statutory exceptions are uncommon and are easily explained to the IRS, mostly at tax filing. Examples include disaster relief or combat zone relief.

2. IRS error: documenting that the error was the result of reliance on IRS advice
This penalty relief argument is typically unsuccessful and isn’t used much. You must have documented erroneous advice from the IRS that you reasonably relied on, and the IRS doesn’t routinely put tax advice in writing. The Internal Revenue Manual states that the IRS also allows penalty relief based on erroneous oral advice, but in practice, this is rarely seen.

3. Reasonable cause: providing a valid reason that you couldn’t comply based on your facts and circumstances


More commonly, people try to argue that they relied on the erroneous guidance of their tax software or tax professional. This type of argument falls under reasonable cause.

To successfully present a reasonable cause argument for late filing and payment, you must demonstrate that you exercised ordinary business care and prudence but couldn’t comply. You must also demonstrate that your noncompliance was not due to willful neglect.

Most people haven’t traditionally been successful with reasonable cause arguments before the IRS, especially in court. In reality, most penalty abatement determinations never get to court. Most are administrative determinations made by the IRS.

To be successful in reasonable cause determinations, you’ll need to make sure that the IRS considers all your facts and circumstances. If you get a penalty abatement denial letter that doesn’t seem to address all the facts and arguments presented in your penalty abatement request, should request an appeal of the determination.

4. Administrative waiver: taking advantage of a provision that facilitates effective tax administration

The IRS can provide administrative relief from a penalty under certain conditions. The most widely available administrative waiver is first-time penalty abatement (FTA).

FTA can be used to abate the failure to file, failure to pay, and failure to deposit penalties for one tax period when you have a clean compliance history for the past three years. You can use FTA for penalties on Form 1040, Form 1120, and payroll and pass-through entities.

FTA is the easiest of all penalty relief options. You can request it by calling the toll-free number on your IRS notice, or your tax professional can call the dedicated tax pro hotline or compliance unit (if applicable) to request FTA for any penalty amount.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.


Advance Tax Relief is a Professional Tax Relief Organization

HOW TO HANDLE AN IRS CP2000 NOTICES (UNDER REPORTER INJURY)

HOW TO HANDLE AN IRS CP2000 NOTICES (UNDER REPORTER INJURY)

IRS CP2000 NOTICES, AT A GLANCE:

You get a CP2000 notice when your tax return doesn’t match income information the IRS has about you. CP2000 notices aren’t audits, but they work the same. It’s important to fully respond by the IRS deadline.

You have the right to contest penalties and appeal a CP2000 determination. But you must ask.
You can get expert help resolving your CP2000 notice.

DO YOU NEED IRS TAX HELP?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ Rated
Call (713)300-3965

***We have successfully resolved millions in back taxes for our clients

What you need to know about CP2000 notices
When your tax return doesn’t match income information the IRS has (like Forms W-2 and 1099), the IRS sends a notice. It’s usually a CP2000 notice, also called an underreporter inquiry.

This notice basically proposes taxes, and possibly penalties, you might owe for missing income on your return. Sometimes, the IRS can question deductions or credits you took that don’t match information statements filed under your Social Security Number.

But CP2000 notices are computer-generated and may not be right. You might not owe the full amount – or anything at all. In fact, many taxpayers who get a CP2000 notice don’t end up owing anything.

What to do if you get one of these notices? There’s a process. You or your tax pro will need to investigate the issue more and get back to the IRS within a certain amount of time. And, if the IRS says you owe penalties, that’s something you’ll need to take care of, too.

Here’s how it works.

How to respond to a CP2000 notice


1.  Evaluate your situation and decide on the right response.


Start by validating that you owe more taxes. To do that, you’ll need to determine whether you correctly reported the income in question on your tax return. Here’s how:

Gather all the information statements under your Social Security Number. These are the forms you get at tax time reporting your income for the year (like W-2s and 1099s). Compare those statements with your tax return to see whether you left any income off your return.
If so, you’ll need to properly calculate any additional tax that you may owe. Keep in mind that you also might have additional deductions that factor into the new tax calculation.
Determine whether you agree, partially agree or disagree with the CP2000 notice.


2. Respond to the IRS.


If you agree with the notice, send the CP2000 response form back to the IRS with payment (if applicable). If you can’t pay the entire amount, you can request an installment agreement with your CP2000 response.
If you partially agree or disagree with the CP2000 notice, you’ll need to compile and mail a response to the IRS with documents proving your position. You can attach a corrected return to help clarify your position, but don’t file an amended return. If the IRS accepts your explanation, the IRS will correct your return.
You can also address any proposed penalties in your response to the underreporter notice.
If the IRS rejects your response, consider appealing the decision.


3. Prevent future underreporting and resulting penalties.


After about eight weeks, call the IRS or analyze your transcripts to confirm that the IRS resolved your issue.


To avoid penalties on more recent returns, analyze your information statements to determine whether you made the same error in other years. If necessary, you can file an amended return on these years to avoid the additional 20% accuracy penalty.


For future returns, gather all your information before filing. You can request your information statements from the IRS (called wage and income transcripts). But beware, wage and income transcripts don’t contain all your Forms W-2 and 1099 until late May.

HOW TO GET EXPERT HELP


An Advance Tax Relief Attorney can help you investigate the cause of your CP2000 notice and communicate with the IRS.

Make an appointment for a free consultation with a local tax professional by calling 713-300-3965.

Gather these six items for your appointment
A copy of your IRS notice
Any responses you’ve already sent to the IRS
A copy of the tax return in question
Copies of your tax returns from the year before and the year after the tax return in question
Additional deductions or expenses related to the underreported item (example: costs of stock for unreported stock transactions on Form 1099-B)
Any underreporter notices you’ve received in the past
Related Tax Terms
Automated Underreporter Unit
IRS Wage and Income Transcript
Accuracy Penalty
CP2000 Response


GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2017 tax return and past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

Call our team today at 800-790-8574 for more information. For a free consultation, schedule an appointment with us online. Feel free to also learn about us and contact us via www.advancetaxrelief.com.

However, it doesn’t matter where you live, we service taxpayers nationwide. We have settled millions in back tax penalties and interest for our clients nationwide.


Advance Tax Relief is a Professional Tax Relief Organization