The most financially-catastrophic IRS debt collection method is on the rise. In 2006, the IRS reported 3,742,276 levies (garnishments), 629,813 liens, and 590 seizures. Garnishments show a 36% increase over the years 2005 and an 84% increase over 2004. As opposed to liens and seizures – which are limited in their effectiveness – garnishing future income virtually guarantees that the IRS will get their money.
The IRS will leave you very little in your paycheck to survive, and there’s a good chance that it won’t be enough to pay your bills. You may not be able to pay your car payment, house payment, minimum credit card payments, or other important monthly commitments.
There are 3 specific steps that the IRS must go through before a wage garnishment goes into place:
• The IRS will send you a “Notice and Demand for Payment”
• You neglect or refuse to pay the tax
• The IRS sends you a “Final Notice of Intent to Levy and Notice of Your Right to A Hearing” (levy notice) at least 30 days before the levy. They may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.
If you don’t act during this time, you’ll be headed straight into a potential financial disaster. Remember, in the end, the IRS just wants their money. It makes more sense for them to come to a satisfactory payment plan than to risk driving you into financial ruin through a garnishment. By acting quickly, we may be able to get the IRS to drop the levy proceedings and work on an equitable solution.
If you'd like to duscuss the best options for your tax issue, contact us.
