Wage and other income garnishments can have a devastating effect on income.
IRS wage garnishments can attach 75% to 100% of your net wages. State wage garnishments can attach 25% of your income. Additionally, because your employer is made aware of your tax issues, it is extremely embarrassing.
If your income is 1099-based, an IRS levy attaches 100% of your income. 100%! A state levy attaches 25%. This can have even worse long-term effects than wage garnishments – not only is your cash flow halted, but business relationships are severely compromised and many businesses would fear that the IRS will start contacting them. You could be forced to shut down your business.
You can’t hide – The IRS can access your income sources through W-2s and 1099s and the State can access your wage information almost immediately through quarterly reports filed by your employer with the Employment Development Department. In either manner, the IRS and State can find out who you work for without your input and simply mail levies to your income sources.
Bank levies can be equally devastating. The IRS and State can issue levies to your bank, and whatever you have in your account when the levy reaches your bank is attached. If you are an employer, you may end up not meeting payroll.Tax Solutions Group can help.
They step in and ensure that levies are not issued while your case is researched. In almost all cases, if the state has issued a wage levy, Tax Solutions Group can get a 30-day delay enabling you to receive your full paycheck. Once returns and/or financials are put together, wage levy releases are negotiated with the IRS and State.