IRS Wage Levies: One of the Many Ways the IRS can Collect

An IRS wage levy is a garnishment from a person's compensation which goes to pay back taxes; levies will usually come after several letters and phone calls from the IRS regarding taxes owed.

An IRS wage levy is an aggressive form of tax collection and is often used as a last resort. The IRS would rather use a different method to collect unpaid taxes, and a wage levy usually only comes after ignoring previous warnings. Once the IRS decides to enforce the levy, they will contact your employer and have part of your wage deducted before it gets to you in order to pay the debt.

The Internal Revenue Code allows the IRS not only to levy the debtor's wages, but also their other monetary assets such as bank accounts and pensions if the taxpayer continues to ignore or refuse to pay taxes; furthermore, they can go so far as to place liens on property, such as cars, houses, or boats if the money is not paid. The IRS can even seize property of yours that is being held by someone else. While giving up a boat because of back taxes may not hurt a person, losing a house because of it could put many people in a position of hardship.

If one has neglected or refused to pay any back taxes, an IRS wage levy is a possibility. There are, however, several solutions to the problem, the most common of which is applying for an Offer in Compromise. With an Offer in Compromise, a debtor can get IRS approval to make payments over time instead of paying at once. Another option is to hire a tax consultant that specializes in back taxes and can help people to find the best options for getting out of debt.

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