Over 11 million Americans currently owe a collective $125 billion in taxes to the IRS. That’s not good news, considering that the IRS has the legal authority to levy consequences against those individuals.
One of those consequences is an IRS wage garnishment, which means the IRS can seize a portion of your paycheck before it even reaches your hands. If you’re subject to wage garnishment, then you’ll receive IRS form 668-W before the garnishment starts—but you still have time to seek out tax debt help. Below, learn more about this important IRS form and what steps you should take after getting one.
What Is IRS Form 668-W?
Receiving an IRS form 668-W is intimidating, but it’s one of the most common tax problems we see. It’s a notice of an IRS wage garnishment. It’s often sent to your employer to alert them about the garnishment plans.
Once the garnishment goes into play, an employee’s wages, commissions, bonuses, and salary are up for garnishments. Retirement income and other benefits aren’t safe, either; these can still get garnished, too. It’s important to also understand that these garnishments are continuous—your employer is expected to comply until the IRS releases the levy.
How Employers Should Deal With a Wage Levy
If you’re an employer and you receive a 668-W, then there are some specific steps you must take. You have at least a full pay period between receiving a 668-W and complying with the garnishment order, though. The IRS advises employers to encourage the employee that owes the tax liability to contact the IRS. In some cases, that employee can deal with the garnishment and get it removed. If those attempts are unsuccessful, though, then you’ll need to start complying with the order.
To do so, you need to give your employee parts 2, 3, 4, and 5 of the form and have them sign a statement. Then, you’ll need to calculate what that employee’s net pay minus exemptions will be. You’ll need to send over all this information to the IRS.
From there, you’ll need to start complying with the levy and sending over the required amount.
How Employees Should Handle Form 668-W
If you’re currently an employee who was informed about a 668-W (or you received one), then a wage garnishment is imminent. If you haven’t done so already, attempt to contact either the IRS or a tax debt expert who can help with IRS debt. If you can work out an arrangement with the IRS, then the agency will consider releasing the levy and garnishment.
If you don’t act, then your employer will ask you to fill out a few forms. You need to complete those forms within three days. If you don’t, then calculations will get made for you, which could end up causing you to get garnished more than you should.
Once you’ve filled out the papers and returned them to your employer, you’ll start to notice a smaller paycheck each week or month. You won’t have to take further action, as that money will go straight to the IRS.
Are you worried that the IRS levy will cause significant financial hardship for your family? If so, then it’s possible to contact the IRS and file for an extreme hardship.
Self-Employment and Tax Levy Garnishment
Are you currently self-employed? If so, then your tax levy garnishment situation will be much more complex. A 668-W form isn’t ideal. Why? As a self-employed individual, you are not considered an “employee.” In other words, your independent contractor status means you don’t actually have an employer who can garnish your wages.
It’s more appropriate to get a form 668-A form, which is a levy of third parties. Often, this type of levy goes to your bank. That way, your bank can levy your income stream. This type of form is often called a “1099 levy.” If you received a 668-W form but you’re self-employed, then it may be a good idea to consult with a tax professional or IRS agent who can set you up with a 668-A instead.
Can the IRS Garnish Wages Without Notice?
Do you currently owe a serious tax debt? If so, then it’s normal to worry that your wages or bank account could be garnished unexpectedly. So, can the IRS garnish wages without notice? The good news is that the short answer is “no.”
IRS wage garnishment cannot happen without ample notice. First, you should receive a notice by direct mail. You will have the right and opportunity to speak with the IRS directly in an attempt to arrange a payment schedule. You’ll also need to fill out forms when your employer gets the levy notice.
Tax Debt Help
Wage garnishment is not an ideal situation for anyone. You won’t have control of your full paycheck, and you’re putting undue stress on your employer, too. If you’re facing this type of situation, then it’s in your best interests to research tax relief solutions like installment plans. If you need help learning more about your options, then speak with a tax professional who can help.
Understanding Your IRS Form 668-W
Have you recently received IRS form 668-W? If so, then your wages, salary, or income are about to get garnished. The good news is that you are allotted a period of time between getting notified and the time when the garnishment will begin.
During this time, it’s advised that you seek out tax debt help from an expert. In many cases, you can work out a payment plan with the IRS.
Leave your tax worries behind with expert guidance from a team that has 30 years of experience working with the IRS. Contact us today to get started!