An IRS wage levy is a legal action taken by the Internal Revenue Service to collect unpaid tax debts. This action allows the IRS to garnish a portion of the wages earned by a taxpayer in order to satisfy any outstanding tax liabilities.
Under a wage levy, the IRS contacts the taxpayer’s employer and orders them to withhold a portion of the taxpayer’s wages until the tax debt is fully repaid. The amount withheld is determined by IRS calculations and is based on the taxpayer’s filing status, exemptions, and deductions.
A wage levy can have serious consequences for a taxpayer, including significant financial hardship and damage to their credit rating. However, there are ways to avoid or lift a wage levy. For instance, taxpayers can enter into a payment plan with the IRS, file an appeal, or provide evidence of financial hardship.
It’s important to take action as soon as possible if you receive a wage levy notice from the IRS. Seeking professional help from a tax attorney or accountant can greatly improve your chances of resolving the issue quickly and effectively.