Do you owe taxes to the federal government? You are likely to hear from the IRS sooner rather than later. The agency is notoriously aggressive in collecting on delinquent tax debt—especially so when a large amount is allegedly owed. The Internal Revenue Service (IRS) reports that approximately $92.6 billion in delinquent tax debt was collected in the Fiscal Year 2021 alone.
If you do not take any action, you may face wage garnishment and/or a property levy against your bank account or other property. It is imperative that you know your rights, your responsibilities, and your legal options. In this blog post, our Frisco IRS tax debt lawyer provides a comprehensive guide to IRS wage garnishments and IRS bank levies.
The IRS Can and Will Collect Delinquent Tax Debt
You are required by law to pay your federal taxes in full when you file your return. If you fail to do so, you are going to receive a bill stating the amount that you owe. If the matter is not resolved, the government will soon initiate collection efforts. Under Internal Revenue Service (IRS) regulations (Topic No. 201 The Collection Process), the agency collection process will continue “until your account is satisfied or until the IRS may no longer legally collect the tax.” Here is an overview of the IRS's most common tax debt collection options:
- IRS Wage Garnishment: Also sometimes referred to as an IRS wage levy, an IRS wage garnishment is a seizure of your wages. When put into place, it means that a portion of your wages will be sent from your employer directly to the IRS during each pay period to resolve your delinquent tax debt. Once the IRS gets a wage garnishment, there are only three options to resolve the matter 1) Allow the garnishment to remain in effect until the total amount is paid, 2) Work out an alternative payment plan or settlement with the IRS, or 3) Take legal action to get the IRS to release the wage garnishment.
- IRS Property Levy: Through a property levy, the IRS can move to take your property (seize property) in order to resolve an outstanding tax debt. Under federal law, the IRS can move to seize virtually any type of property. In many cases, IRS tax levies are placed on bank accounts or other financial accounts. The IRS can take action by placing a lien on your home or other real estate that you own.
Note: If you believe that you owe less than the IRS is claiming that you owe, you need to take immediate action to challenge their determination. A tax debt attorney can help.
You Will Likely Receive Multiple Notices Before a Garnishment or Levy
As a general matter, the IRS will send a taxpayer multiple notices before it places a wage garnishment or property levy against them. Indeed, in most cases, a taxpayer will receive five different notices that are designed to prompt them to resolve the matter. The last notice is called a Final Notice of Intent to Levy and Notice of Your Right to a Collection Due Process Hearing. If you received this notice from the IRS, it means that the agency is preparing to seek a garnishment and/or a levy. You need to take immediate action to protect your financial interests. Contact a Texas IRS tax debt resolution attorney as soon as possible.
Filing for Personal Bankruptcy Protection Will Halt a Wage Garnishment
One option for stopping a wage garnishment is filing for personal bankruptcy protection. Doing so will not prevent the IRS collection activities permanently if the tax debt is owed and is not eligible for discharge in bankruptcy, but the automatic stay will require the IRS to pause collection efforts. Personal bankruptcy may be the best option for those with other (significant) unsecured debts in addition to their federal tax debt. If you have any questions about filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy, our North Texas personal bankruptcy attorney is more than ready to help.
An Overview of Your Options for Dealing With Tax Debt—Including Garnishments and Levies
You do not have to sit back and let the IRS garnish your wages, levy your bank account, or seize your property. There are several different options available to help taxpayers resolve outstanding debt. Depending on your financial circumstances, you may even have options for resolving your overdue federal taxes for far less than you owe—potentially even pennies on the dollars. Here are three potential tax relief options in North Texas:
- Short-Term Payment Plan (180 Days or Less): Virtually all taxpayers can automatically qualify for a short-term payment plan. If you can resolve your tax debt in 180 days or less, the short-term payment plan is often the best path forward.
- Long-Term Payment Plan (Installment Agreement): Also called an installment agreement, a long-term payment plan allows taxpayers to settle debt over a longer period of time. Many taxpayers can qualify for a streamlined payment plan that gives them up to 72 months to pay. You may also qualify for a 10-year repayment plan in certain circumstances.
- Offer-in-Compromise (Settle Tax Debt for Less): Are you simply unable to pay your tax debt given your financial situation? You may be able to resolve the balance for far less than the full amount owed. The IRS allows taxpayers to propose an offer-in-compromise. A Texas tax debt lawyer can help you negotiate a settlement agreement with the IRS.
Contact Our Texas IRS Wage Garnishment Attorney Today
At The Page Law Firm, our Texas IRS tax debt lawyer has the professional skills and knowledge that you can count on. If you are falling behind on your taxes, we are here to protect your rights and help you find the best solution. Get in touch with us by phone at (214) 618-2101 or send us a direct message for a strictly confidential initial consultation. With a law office in Frisco, we help taxpayers fight wage garnishment and bank levies throughout North Texas, including in Collin County, Denton County, Rockwall County, Dallas County, and Tarrant County.