What is a Tax Levy? 

An IRS levy allows the government to seize your property to satisfy a tax debt. The levy can allow seizure of money in your bank account, garnishment of your wages, and even take vehicles, real estate, and other personal property.

If you are facing a tax levy, contact the attorneys at Morrison + Murff right away. You have rights and options. 

How Much Can the IRS Garnish?

When the IRS proceeds with a garnishment, your employer will withhold a portion of your wages each pay check until the taxes are paid in full, or you take steps to step the collections. The IRS has even more power than ordinary creditors when it comes to garnishment, and is not subject to Utah's 25% allowable wage garnishment statute, which means you could have very little left to live on. 

There are almost always better options than wage garnishment to pay your back taxes. If you are facing an IRS or State tax garnishment, call the attorneys at Morrison + Murff right away. 

How Can You Stop Wage Garnishments? 

Unless the IRS agrees to an alternative resolution, such as a installment agreement, offer in compromise, or bankruptcy filing, the IRS and State may be able to continue garnishing you until your balance in paid in full. This could mean you spend months or years getting garnished, and all while interest continues to run. 

Defenses to an IRS or State Garnishment include:

  • The allowed collection time expired prior to the IRS serving the garnishment 
  • The IRS did not provide you the full 30 days to respond to the notice
  • Filing a Chapter 7 or Chapter 13 Bankruptcy 
  • Submitting an offer in compromise or requesting an installment agreement

Lien vs. Levy

As an alternative to a levy, the IRS can also place a lien on property that you own.

That lien secures the loan, making it harder for you to convert the asset to cash (without paying the tax bill). To create a lien, the IRS files documents at local government offices, making a public record of the taxing authority’s interest in your property.

A lien is different from a levy because a lien gives them the ability to potentially take and sell your assets. With a levy, your assets are actually taken.

How can you get a lien released? 

When the IRS moves forward with your wage garnishment, your employer has no choice but to comply with the IRS and remit a portion of your wages to the agency to pay your tax bill. The IRS has more garnishment power than ordinary creditors insofar as it is not subject to the state and federal garnishment limitations, which means it can leave you with very little money each week to live on. 

During 2015 for example, a single parent with two children who files as head of household can be left with as little as $409 per week. This means that if you earn $1,000 per week, the IRS takes $591 of it, and if you earn $2,000 per week, it can take $1,591. However, the amount of your garnishment will depend on how much tax you owe.