by Henry Byers
http://www.irs-levy-hq.com
© 2007
IRS garnishment refers to the notice issued by
the IRS department to withhold all or some part of the money to
the court or to the person who has won the lawsuit to claim the
money. The IRS garnishment is limited by law according to which
only up to 25% of the disposable earning of a particular period
can be garnished. Also, the amount by which the disposable earnings
exceed thirty times the Federal minimum hourly wage in effect
at the time earnings are payable.
If someone has a problem regarding the payment
of the taxes he can approach the IRS department and seek relaxation
in payments of the dues. Mostly IRS garnishment is levied as the
last resort. In most of the cases IRS accepts some sort of payment
plan if some basic information is provided. This information includes
the returns filed till date. This is required to state that although
there are dues pending but the exact financial status has been
stated to the government.
All assets need to be disclosed including all
cash, bank accounts, investments, etc. This is to certify that
there is not enough cash available to pay to the IRS department
as tax. Therefore details of all checking accounts, savings account,
money market or brokerage account should be clearly stated. The
person should also be not in a position to borrow the amount owed
to the IRS department. There should not be enough liquidity in
the retirement account as well from which money can be borrowed
or liquidated.
In case of IRS garnishment the IRS officers do
not handle the cases, which are less than $25,000. According the
to the IRS garnishment law the person requires to pay the amount
which is the difference between the monthly income and expenses
required for the month. This amount needs to be submitted to the
IRS department for the clearance of tax dues. The IRS has already
determined the monthly expenses for any individual. They need
to be matched with the person’s monthly expense. This is
done on the basis of form completed by any individual as stipulated
by the IRS department. If the person is a businessman then a financial
statement of the business also needs to be attached with the completed
form stating the personal financial assessment.
Thus after the filing the returns and completing
the form, IRS determines the monthly amount payable towards IRS
garnishment. But it is to be noted that all along the payment
period IRS shall continue to add penalties and interest on the
amount outstanding. This eventually leads to larger payout than
the actual sum due towards taxes. This is due to the reason that
along with the principal amount due the person also keeps on paying
the charges levied as interest or penalty.
Thus it is better to avoid IRS garnishment so
as to keep the government at bay. This is payment conditions are
usually not explained by the IRS department. Further, IRS also
warns the tax payers to look in to the promoter’s claim which
states that tax debts can be settled for less through Offer in
Compromise program. This program is only beneficial when the tax
payer is eligible as per the rules stated in the program.
NBA
Benefit Provider - The
Fiducial Group
NBA
Resource Article - How
And Where To Find Valuable Tax Information
NBA
Resource Article - Ten
Ways to Avoid Problems at Tax Time
Reprint
of this article does not constitute an endorsement by the National
Business Association; the article is for informational purposes
for our members and viewers of our Web site.
