The Wage Levy Formula - How Does the IRS Know How Much to Take

Posted: 26 Feb 2008 | Categories: Taxes

Quick and Dirty…The IRS can use a wage garnishment, sometimes called a wage levy to get money straight from your gross pay check in order to payoff your IRS tax debt. There seems to be some mystery and misconceptions’ surrounding the wage garnishment and there is some straight information on how a wage garnishment works.

How do they know what to take out? The IRS uses the following basic formula to figure out how much they’re going to take out of your paycheck.

The formula is a follows: the amount deducted from you total expenses and filing status that you filed out on your W-4 form. The IRS then adds in your standard deductions, and what’s left beyond that is what the IRS applies to your debt each pay period.

The IRS will consider taking out less from your check if you can prove that you need additional funds to pay the most basic bills. Also court ordered child support is exempt from being levied.

For example: a single person claiming only 1 exemption on their W-4 would receive 172.12 + any deductions + child support, if any; as income after a wage garnishment is in effect. See IRS Publication 1494 for a complete breakdown.

Because a wage levy is a non-voluntary form of paying back the government the taxpayer can not designate where the levied money is to be applied.

Can’t you be fired…Some employers will threaten to fire an employee who has had their wages garnished. An employer who fires an employee because of an IRS wage levy that employer can be fined $1,000 and/ or face 1 year jail time.

Top Secret…The only exception is for employees that have security clearance. For someone with security clearance a tax lien or tax levy will cause their employment termination.

You can beat it…A wage levy is very difficult to live with and the IRS will make sure they can keep it in effect as long as possible.

Now you have the smoking gun…Use it!

Richard Close was an IRS-Hitman. He was a revenue officer who took out anyone that owed the IRS money. He left that behind and now helps thousands of Americans beat Uncle Sam and save thousands of dollars. The IRS-Hitman can help you with your tax debt problems. He has partnered with Tax Defense Network to offer free advice and tips on removing wage, bank, and tax levies; and arms you with the skills to slash your tax debt. Visit at: http://www.irs-tax-levy-hq.com Contact: http://www.taxdefensenetwork.com or call 1-888-248-9058

Article Author :Richard_Close