TAX DEBT LEVY AND WAGE GARNISHMENTS

A tax levy on your paycheck is also referred to as wage garnishment.

This can happen when you owe money to the IRS from unpaid taxes. The IRS has a legal right to take money directly out of your paycheck to pay the taxes you owe.

To do this, the IRS will contact your employer directly and tell them how much to pay to you and how much to send directly to them. States are allowed to use the same means to collect unpaid taxes owed to them as well.

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The IRS tells your employer to garnish your wages by sending them this IRS publication. It contains a table that states how much you will get paid and then the IRS will take everything else.

 

There are several factors that determine how much of each paycheck you can keep. These include:

 

Your tax filing status

How frequently you are paid

How many dependents you claim

Whether you are 65

If you are blind

These factors affect how much you can exempt from garnishment. You can consult the table linked above for an estimate of how much of your paycheck you can keep.

 

The IRS has the right to levy any bonus income you receive in addition to your regular paycheck. Unfortunately, because you were already paid your allowed amount in your regular paycheck, the IRS can keep your entire bonus check. Your employer will be forced to send the entire check directly to the IRS.

 

The IRS has the right to levy to collect back taxes under this section of the tax code.

 

Tax Levy Qualifications

Fortunately, most people can avoid a tax levy on their paycheck by taking action before things get to that point.

 

Remember that if you’re ever receiving notices from the IRS, don’t ignore them! Contact a tax attorney right away to stop things in their tracks.

 

In order for the IRS to have the legal right the garnish your wages, several things must first occur:

 

1. The IRS determines that you owe unpaid taxes and sends you a notice demanding payment.

 

2. You fail to respond to the notices from the IRS and fail to pay what you owe.

 

3. The IRS must send you what is called a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing.” They are required to send this at least 30 days before garnishing your wages.

 

If you don’t respond to the final notice, the IRS has the right to start garnishing your wages after 30 days. It’s important to note that there are some exceptions.

 

The IRS isn’t subject to the rules listed above if they feel the collection of the taxes owed is in jeopardy. If you are a federal contractor and owe taxes or you were issued a Disqualified Employment Tax Levy, you will not be offered a hearing before the levy starts.

 

What Can the IRS Levy?

The IRS has a lot of power when it comes to what they can levy, but there are some restrictions.

They can take your salaries, commissions, wages, dividends, and payments on a promissory note held by someone else. They can also levy your bank account, any bank account you are a joint account holder on, retirement accounts, your house, your car, federal retirement income from the Office of Personnel Management, federal contractor payments, and other property.

The IRS can’t take certain types of property. These include Social Security Disability Insurance, unemployment benefits, specific public assistance payments, workers compensation benefits, some annuity and pension payments, court-ordered child support payments, and assistance from the Job Training Partnership Act.

They also can’t take your schoolbooks, clothing, or certain amounts of fuel, books, furniture, and tools for business, professions, or trades.

 

Avoiding and Stopping a Tax Levy

The number one way to avoid a tax levy on your paycheck is to file your taxes correctly and make all payments on time. The goal is to owe nothing to the IRS.

 

If you are struggling to make your tax payments, a tax relief professional can help. There are many options available to get you out of tax debt including payment plans, settlements, penalty reductions, offers in compromise, etc.

The worst thing you can do is bury your head in the sand and ignore the IRS. If things have gone too far and the IRS is already garnishing your wages, it’s not too late to stop the process.

You can contact the IRS to come to an agreement or resolution and stop having your wages garnished.

Contact Us Today

If you have a tax levy on your paycheck or the IRS is threatening you with one, you need a tax professional who specializes in tax debt relief on your side.

Contact Advance Tax Relief to Help Deal with Back Taxes

Seeking professional help when handling back taxes can help you avoid the discussed errors. At Advance Tax Relief, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today (713)300-3965 for back tax filing and tax relief services.

 

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

 

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RECEIVED A NOTIFICATION OF IRS TAX LIEN? WHAT TO DO..

Tax liens — don’t you just hate them? They can be scary, but there’s no reason to panic. The situation isn’t as dire as you might believe, and help is available.

If you receive a Notice of Federal Tax Lien, you want to handle it as quickly and effectively as possible so you don't lose any assets. The IRS uses tax liens as "encouragement" for you to pay your taxes and to cement their interest in your property if you don’t.

However, the lien process has several steps, provisos, and intricacies that can either spell a less fraught experience or make things worse. It all depends on your response.

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After determining your tax liability, the IRS places a lien, sending you a Notice and Demand for Payment (also known as a tax bill). Then you decide to ignore it or refuse to pay the taxes.

Just so we’re clear, the lien amount doesn’t just include your tax obligation. It also includes interest, additional amounts determined by the Federal government, additions to the tax, assessable penalties, and any costs. See Section 6321 of the Internal Revenue Code for details.
Before diving into what to do about a lien notification, let’s have a recap of what a lien is and isn’t.

Tax Liens 101
The IRS files tax liens against taxpayers who have unpaid tax balances. State and local governments can do the same thing, and the processes are similar.

The IRS can issue a Notice of Federal Tax Lien, but it doesn’t have to. In general, the notification is how the IRS puts itself into first place in any line of creditors. The Federal tax lien document is recorded with the county government where you live or do business, making it a public record. In fact, until the IRS issues the notice, the lien remains a secret from all other creditors.
If there is any good news about all this, it’s that the IRS rarely issues a lien unless you owe more than $10,000 in taxes. So, even if you receive a notice, the IRS may decide not to attach a lien if you owe less than this.

A Federal Notice of Tax Lien says the following:
“There is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the amount of these taxes, and additional penalties, interests, and costs that may accrue.”  

The notice records the total amount you owe the IRS. If you sell any property with a lien attached, the IRS receives sales proceeds up to your balance before you receive a cent. Also, liens remain attached to a property, even if a third party takes ownership. It stays there until the taxpayer makes arrangements for its removal.
A lien is not a levy. A lien is a document declaring that the IRS is protecting the government's ability to collect money. A levy is the forced collection of tax, typically by property confiscation and sale or seizing money from your bank account or paycheck.

DOES THE IRS WANT TO SEIZE YOUR ASSETS?
All About Lien Notifications
Before a tax lien arises, three things must happen.
The IRS must perform an assessment of your tax obligation.
The agency must send a Notice and Demand for Payment (tax bill).
You must fail to pay (or do anything else about it).

In step 1, the IRS uses your filed tax returns, IRS audits, tax court decisions, or a determination of a tax error to assess the amount you owe. Then it mails the Notice and Demand for Payment to your residence or place of business. The letter goes to the last known address the IRS has on file.

The tax code requires the IRS to send the notice within 60 days of the assessment. However, if it misses the deadline, it does not invalidate the notice. If you pay in full within 10 days of the assessment date, you can avoid interest on your tax debt. Otherwise, the lien takes effect automatically.

While a lien notification is a public record that anyone can find at the county records office, it no longer appears in any of the three major credit bureaus' credit reports. Seems there was a problem with accuracy, so in 2018, the bureaus stopped including them. That doesn’t mean that creditors can’t find out.

PREVENTING A TAX LIEN
How can you prevent a federal tax lien? Pay your taxes. It’s that simple.
If something prevents you from paying them in full, contact the IRS immediately to make other arrangements like an offer in compromise or enrollment in a guaranteed installment plan. You may need to pay a setup fee.
Keep in mind that until your balance continues to accrue interest and penalties until it’s paid in full.

HOW TO REMOVE A LIEN
The IRS removes a lien if:

It was filed in error.
The outstanding balance is paid in full or otherwise satisfied
It becomes unenforceable because the 10-year statute of limitations has passed
The property to which the lien is attached has more than doubled in value over the value of the tax obligation
The IRS’s interest has no value
A right of subordination has been filed

About that 10-year statute of limitations — it can get complicated. The collection time can start and stop, delaying the 10-year limit beyond the actual date. Also, the IRS will likely file suit for a judgment before the lien expires, so the lien continues until the judgment is met.

A tax lien is removed by withdrawal, release, or a discharge of property. Withdrawal usually means the IRS placed the lien in error, and it's like the lien never existed. If you receive a notice and believe the IRS made a mistake, contact them immediately to get the ball rolling on a withdrawal.

The IRS releases the lien within 30 days of full payment of your outstanding tax obligation. Many liens are released automatically. The IRS can also issue a removal if it will speed up the collection process or in the best interests of the taxpayer and IRS.

The Fresh Start Program provides eligible taxpayers a lien release if the outstanding balance is less than $25,000. If your balance is higher than that, you can transfer the debt to a credit card or home equity loan or by making payments until the total is under $25,000. Then you can apply for Fresh Start.

A discharge allows a taxpayer to sell a property free of the lien.
Subordination doesn’t remove a lien, but it does remove the IRS from first priority among creditors, allowing other creditors to move ahead of them to receive payments.

DO YOU NEED IRS TAX HELP?

Final Note
A Federal Tax Lien can make obtaining a mortgage or other credit difficult. It remains attached to all existing assets and future assets acquired during the time the lien is in effect. Bankruptcy does NOT remove a lien.
If you receive a Notice of Federal Tax Lien, respond immediately. Determine if the IRS made an error or contact them to start the process of payment in installments or an offer in compromise.

Contact Advance Tax Relief to Help Deal with Back Taxes
Seeking professional help when handling back taxes can help you avoid the discussed errors. At Advance Tax Relief, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today (713)300-3965 for back tax filing and tax relief services.

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

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WHAT TO DO IF YOU MISS THE APRIL DEADLINE TO FILE AND INCOME TAXES

The federal income tax deadline has passed for most individual taxpayers. However, some haven't filed their 2021 tax returns or paid their tax due.

Some people may choose not to file a tax return because they didn't earn enough money to be required to file. Generally, they won't receive a penalty if they are owed a refund. However, they may miss out on receiving a refund.

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On the other hand, tax owed and not paid by April 18, 2022, is subject to penalties and interest. Taxpayers in Maine and Massachusetts had until April 19 to file and pay due to the Patriots' Day holiday in those states.

Anyone who didn't file and owes tax should file a return as soon as they can and pay as much as they can to reduce penalties and interest.

The military community can also file their taxes using MilTax, a free tax resource offered through the Department of Defense. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

If taxpayers find that they owe taxes, they can review their available payment options. The IRS has information for taxpayers who can't pay the taxes they owe.

Some taxpayers may have extra time to file their tax returns and pay any taxes due. This includes some disaster victims, taxpayers living overseas, certain military service members and eligible support personnel in combat zones.

Filing soon is very important because the late-filing and late-payment penalties and interest on unpaid taxes add up quickly. However, in some cases, a taxpayer filing after the deadline may qualify for penalty relief. For those charged a penalty, they may contact the IRS by calling the number on their notice and explain why they couldn't file and pay on time.

Taxpayers who have a history of filing and paying on time often qualify for administrative penalty relief. A taxpayer usually qualifies if they have filed and paid timely for the past three years and meet other requirements.

Contact Advance Tax Relief to Help Deal with Back Taxes

Seeking professional help when handling back taxes can help you avoid the discussed errors. At Advance Tax Relief, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today (713)300-3965 for back tax filing and tax relief services.

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

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation

#TaxAttorneys

#TaxDebtRelief

#TaxHelp

#TaxRelief

#BestTaxReliefCompanies

OWING BACK TAXES? CAN I GET A PASSPORT?

If you currently have outstanding tax debt, you may be wondering, “Can you get a passport if you owe taxes?”. The answer depends on the severity of your debt.  

According to the IRS, you will not be able to renew or apply for a passport if you are considered to owe “seriously delinquent” back taxes in the amount of $53,000 or more. Based on these conditions, the State Department can also revoke your current passport. If this applies to you, it’s wise to figure out a plan to repay your tax debt before you book any flights out of the country. 

So, can you get a passport if you owe back taxes?—yes, if your tax debt is not considered seriously delinquent. In this post, we’ll cover how to figure out whether you’re disqualified from obtaining a passport due to your back taxes, as well as how to renew or apply for a new passport while you still owe debt to the IRS.

Passports & Back Taxes: The Basics

One of the ways the government can intervene to ensure they receive taxes that are owed to them is by restricting passport privileges. The relationship between U.S. passports and taxes is that it gives the IRS a measure of control to incentivize people to repay in order to be able to travel outside the country. Once the IRS determines that you are considered seriously delinquent on back taxes, the agency will notify the State Department. When that action has been taken, the State Department is able to deny your application for a passport or passport renewal.

The State Department also then has the right to revoke your passport, rendering you unable to travel outside the U.S. until you resolve your tax debt.

That said, not every instance of tax debt will result in passport restrictions. According to Business Insider, as of January 2020, the average tax debt is $16,849, which is well below the amount the IRS considers seriously delinquent. This means that for most people asking, “Can you get a passport if you owe taxes?”—the answer is yes. However, if you are one of the individuals who finds themselves in severe tax debt, your ability to use your passport may be limited. If you do find yourself in a position where you can’t use your passport because you owe back taxes, our experts can help. 

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At Advance Tax Relief, we are skilled at tax debt relief and can help you make arrangements with the IRS to repay your back taxes. In some cases, we may even be able to help reduce the amount you are required to repay. In order to determine which position you are in, it’s important to understand the conditions around when passports are denied or revoked because of tax debt.

Can Owing Back Taxes Prevent You from Getting a Passport?

Yes, you can be denied a passport if you owe back taxes. Not only can you be denied when applying for a new passport, but your renewal may also be turned down. However, there is some leeway in how these actions are deployed. Instead of an automatic denial, your application will be held for 90 days. This gives you time to determine whether the certification as seriously delinquent is incorrect or to make payment arrangements with the IRS.

Can the IRS Put a Hold on Your Passport?

Yes, your current passport can be revoked or put on hold. The hold will be released when you make arrangements for repayment with the IRS, whether that be paying in full or setting up a payment plan.

What Disqualifies You from Getting a Passport?

Can owing back taxes prevent you from getting a passport? Yes. But there are also many other factors that may be standing between you and your travel plans. In addition to being denied a passport if you owe taxes, you may also be disqualified if:

There is an outstanding state or federal warrant for your arrest

One of the conditions of your parole or probation is that you remain in the U.S.

You owe more than $2,500 in past-due child support (Unless you have an arrangement with your state agency)

You have a warrant for a felony in a foreign country

You have unpaid federal loans

You are currently incarcerated

Now that you have a better perspective of all the factors that could be considered in denying or revoking your passport, let’s get back to the main question at hand, “If you owe back taxes, can you get a passport?”. For many, the answer is yes.

How Is Seriously Delinquent Tax Debt Determined?

Only certain tax debt is considered to be in “seriously delinquent” status. If your back taxes are considered seriously delinquent, you will receive a CP508C Notice from the IRS. 

However, there are a variety of exceptions that are made when it comes to which back taxes are used to calculate your delinquency status. If your all or part of your tax debt falls within one of the following categories, it may be excluded from what is considered seriously delinquent:

Debt that is part of an approved installment agreement and is being paid on time.

Debt that is part of an IRS-approved Offer in Compromise and is being paid on time.

Debt that is currently under suspended collection on the ground of innocent spouse relief.

Debt that is part of a collection due process hearing that has been requested as part of innocent spouse relief.

Generally speaking, you should be aware of your back taxes falling into one of these categories because it would take action on your part to enter into these agreements or initiate proceedings. However, if you have questions as to whether your debt could be considered seriously delinquent, our tax experts can evaluate the state of your debt and provide back taxes help.Debt-Qualifications

Applying for a New Passport If You Owe Back Taxes

You might be thinking, “How can I get a passport if I owe taxes?”. While it depends on your circumstances, it is possible to get a new passport, even if you owe a large amount in back taxes. 

If you want to apply for a new passport but are considered seriously delinquent, you will need to figure out a way to pay your taxes. Whether that is by arranging a payment plan, Offer in Compromise, or paying a lump sum through a tax amnesty program. Once you fall below the seriously delinquent status, the IRS will reverse their certification. This is typically completed within 30 days of payment. However, in some cases, the IRS may be able to expedite this process if circumstances are urgent. 

Once your passport privileges are reinstated, you are free to apply for a new passport. If your passport application was submitted and put on hold because of your tax debt status and you are within the 90-day timeline, the application process will resume where you left off. If you have not yet applied for your passport because you received a seriously delinquent notice, you will need to follow the standard new passport application process.

Renewing a Passport If You Owe Back Taxes

There are several important steps to take if you are trying to renew your passport but owe back taxes:

Ensure that you are not seriously delinquent (otherwise, your application for renewal will be denied or put on hold).

If you are seriously delinquent, you need to contact a tax professional and begin the process of negotiating tax resolution with the IRS.

Submit the required information and documents for passport renewal (Form DS-82, current passport, photo, etc.)

Mail in your renewal application.

If your passport renewal is denied because you are considered seriously delinquent, you will need to begin repaying your tax debt to the IRS before you can move forward.

Traveling When You Owe Back Taxes

You may be wondering “Can I travel if I owe taxes?”, and the answer is maybe. The State Department is allowed to restrict travel for individuals who owe back taxes. However, these actions are typically only applied to those who fall into the seriously delinquent category of tax debt. If you have a pressing matter that requires you to travel outside the U.S. and you have seriously delinquent back taxes, you should make arrangements to pay all or a portion of your taxes (there are a number of tax relief programs you may be able to qualify for) as soon as possible.

Can You Leave the Country If You Owe Back Taxes?

Yes, if your tax debt is not considered seriously delinquent, you can still travel outside the country if you have a valid passport. Keep in mind that if you currently have substantial outstanding tax debt, it could just be a matter of time before you cross the threshold into seriously delinquent status. If you have important upcoming travel plans and growing tax debt, you should consider making arrangements to resolve your unpaid taxes to prevent interference with travel. If you need a passport and owe taxes, we can help.

Pay Back Taxes & Get Your Passport

Instead of asking “Can you get a passport if you owe the IRS?”, the better question is, “How can I get a passport if I owe taxes?”.If you need to apply for, renew, or use your passport but back taxes are stopping you, we can help you take the steps necessary to resolve your tax debt. Our team of tax experts is here to help you navigate the complex topic of back taxes and their consequences, and will assist you in finding a tax debt resolution that works for you. 

With a tax professional’s help, you can secure better terms for your debt payments and minimize how much you are required to pay, including interest and penalties. For over a decade, our team has helped taxpayers resolve tax issues big and small to restore their good standing with the IRS, and we can do the same for you.

Contact Advance Tax Relief to Help Deal with Back Taxes

Seeking professional help when handling back taxes can help you avoid the discussed errors. At Advance Tax Relief, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today (713)300-3965 for back tax filing and tax relief services.

 

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

 

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief

#TaxHelp 

#TaxRelief

#BestTaxReliefCompanies