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
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