A wage levy may be less effective against a self-employed taxpayer, which could cause the IRS to pursue other enforced collection actions. Because self-employed taxpayers may receive compensation for many different clients, the IRS can’t initiate a continuous wage levy against an independent contractor the same way it can for an employee.
Wage Garnishment Procedure
For employees, the IRS can send a notice to your employer ordering them to comply with the wage garnishment. Your employer is required by law to send the IRS a portion of your pay.
Most importantly, the wage garnishment is continuous. Your wages are garnished every pay period until your tax debt is paid off or you negotiate a deal to get the wage levy released.
The continuous levy doesn’t work for self-employed taxpayers. The IRS can seize your wages from a single job, but would have to reissue the levy each time another payment gets levied.
Other Enforced Collection Actions
That doesn’t mean you shouldn’t worry about impending IRS collections. There’s a good chance the IRS will take one or more of the following actions:
- File a Notice of Federal Tax Lien which makes it almost impossible to sell or refinance your home.
- Seize the funds in your bank account.
- Seize every tax refund check, including federal and state tax refunds.
- Levy business assets, retirement accounts, or other assets.
- Send a certification to the State Department asking them to revoke or deny your passport.
Protecting Your Property
You can avoid these problems by working with a tax resolution attorney and finding a payment arrangement that works for you and the IRS. Installment plans, Offers in Compromise, or innocent spouse relief may be used to pay back your debt over time or reduce the amount you owe.
If you’ve received a notice of an impending IRS collection action, you should contact a tax attorney immediately. You may have a limited time to stop the levy, and you’ll have a hard time getting property back once it’s been levied.
If your tax debt is accumulating and you aren’t sure how to repay it, be proactive and explore your options before the IRS tries to levy your property.
The Gartzman Law Firm offers tax settlement help for both federal and state tax debt. Use our contact form to request a consultation with an Atlanta tax resolution attorney.