Monday, November 4, 2013
IRS Wage Garnishments and the Taxpayer Advocate Service
I was recently contacted by a reader of my blog who has been forced into an awful position by the IRS. An IRS wage levy (aka wage garnishment) was taking the vast majority (nearly 80%!) of his paycheck. Because of this, his wife and himself lost their apartment and their car was repossessed. In the end, the husband lost his job, and they are barely able to survive, especially being strapped with high prescription drug costs at the same time. At the time I spoke with this person, him and his wife were actually living in a storage (yes, the IRS literally can force people into being homeless -- this is not a made up story).In these situations, keep in mind that an IRS wage garnishment does NOT follow you to another job. So, if you have a wage levy in place and decide to quit your job in order to get out from under the levy, I would encourage you to seek employment to get back on your feet. The IRS won't know where to send another wage levy to an employer until some sort of tax return information gets filed. For example, when your employer issues you a W-2 after the end of the year, they are required to file a copy of it with the IRS, so then the IRS knows where you work and may file a new wage levy at your new employer.Second, if an IRS wage levy or wage garnishment is creating a significant economic hardship for you, I would encourage you to do one of two things. One is to seek professional tax representation to assist you in resolving the matter. If your tax situation is fairly complex, you're going to want to hire professional tax representation to resolve your situation. If your tax situation is otherwise simple, or you simply cannot afford to hire professional tax relief assistance, then by all means contact your local Taxpayer Advocate.There is a Local Taxpayer Advcoate (LTRA) office in all 50 states, and very large cities will have a dedicated office (for example, both Cleveland AND Cincinnati, OH have an LTA). Contact these folks and tell them your situation - it's their job to help out folks such as yourself, and it's a service already paid for by your tax dollars (nice how that works, right?). The nice thing about the Taxpayer Advocate service is that they are an independent arm of the IRS, and they function OUTSIDE of the normal bureaucracy of that agency. In fact, the Taxpayer Advocate service reports directly to Congress, NOT to the Commissioner of the Internal Revenue Service.To find your local taxpayer advocate, do a web search for "IRS local taxpayer advocate" and it will get you right where you need to go -- it should be the very first search result you get on the major search engines.If you are seeking assistance from the LTA, you will most likely want to file the following form, which is IRS Form 911, Request for Taxpayer Advocate Assistance. Your LTA can provide you with this form.So, again, don't let an IRS wage garnishment make you think that you can't go get a job. The wage levy from your previous job does NOT automatically follow you over. Also, either seek professional tax resolution assistance from a reputable firm, or contact your local Taxpayer Advocate office to get help.As always, ignoring your IRS problem does NOT make it go away. It is always best to confront the problem head on, get it resolved, and then move on with your life.