You have the right to representation by an Enrolled Agent (EA), CPA or Attorney. You don't have to face the IRS alone, or at all!
An IRS wage levy is brutal. For a single individual they only leave you about $172 per week to live on. For a family of 3 they only leave you about $411 per week to live on. This is definitely going to create a hardship!
If the IRS has levied your pay check you may be able to negotiate a full or partial release. In most cases a release can be negotiated along with an installment agreement.
When the IRS levies your wages, they allow you to keep a specified amount based on your filing status and exemptions. Basically the IRS lets you keep an amount specified by the tables below after legal withholdings from your paycheck. What are legal withholdings? FICA (Social Security & Medicare), Income Taxes, and certain Court Ordered Payments.
Examples
Single paid once a week. Earning $16/hr for 40 hrs /week Gross Weekly Earnings 640.00 FICA Withholding -48.96 Federal Withholding -96.00 State Withholding -38.40 Net of Legal Withholdings 456.64 IRS Allows You to Keep 172.12 IRS Gets 284.52 Other Payroll Deductions Union Dues -12.00 Charity Contributions -5.00 401K -32.00 Your Net Paycheck 123.12 This leaves a single person approximately $529 per month to live on. Hardly enough.
Married filing Jointly, paid biweekly. Earning $18/hr for 40 hrs /week. 1 child, (3 exemptions claimed). Gross Bi-Weekly Earnings 1,440.00 FICA Withholding -110.16 Federal Withholding -216.00 State Withholding -72.00 Net of Legal Withholdings 1,041.84 IRS Allows You to Keep 823.08 IRS Gets 218.76 Other Payroll Deductions Union Dues -18.00 Charity Contributions -5.00 401K -43.20 Your Net Paycheck 756.88 This leaves a family of 3 people approximately $1,627 per month to live on. Hardly enough.
Source: Publication 1494 Jan 2008
Copyright © 2001-2008 by Gary W. Lundgren, EA
