Gary Bode, CPA: IRS wage garnishment deserves professional help. For a free initial phone consult, please call 399-2705.
Every back tax CPA knows IRS wage garnishment is financially devastating, often leaving you a mere pittance to live on. And the IRS forces your employer to comply, even if the garnishment is in error! This post deals with IRS wage garnishment for back taxes and how a CPA might deal with that.
“The IRS doesn’t decide how much they’ll take from your paycheck. Their table in Publication 1494 calculates how much they’ll let you keep!”
- Gary Bode, back tax CPA
We’re not judgemental
The IRS lien and subsequent garnishment embarasses many people. But most clients are just normal folks. Certainly there is no stereotypical back tax client. In fact, many back tax cases result in a refund, making the reasons why folks don’t file even more of a mystery.
What can be Done?
Check to see if the IRS followed its own rules
If not, you have a valid reason to request release from the federal tax lien, by filing Form 12277. As an example, one report shows that the IRS sometimes levies without notifying your CPA. While IRS Agents have detailed garnishment manuals, sometimes they violate procedural guidelines.
Check to see if the amount is correct
This is a basic step any back tax CPA performs. The IRS isn’t always correct with their calculations. Verifying the amount they demand is always prudent.
Check to see if you can pay less than the entire amount
An Offer in Compromise is the infamous pennies on the dollar technique hawked on late night TV. Any back tax CPA would check to see if you qualify for this strategy, and if so, how cost-effective it might be for you. Beware of the large retainers typically demanded by the “offer mills” like Roni Deutch, Tax Masters, JK Harris, etc.
Back tax CPAs routinely request additional time to prepare your case
The IRS appears to be happy when they have a CPA to deal with, so we’re usually granted this request. If we’re engaged before the garnishment, this simple request provides time to build a solution before garnishment.
File your back taxes
Some folks cannot or will not address an IRS issue until they’re garnished. If you don’t file your tax returns, the IRS is kind enough to calculate a “substitute return”. But they don’t factor in legitimate deductions and credits. So their levy amount is always more than what a CPA prepared tax return would show. I feel this is just a motivational technique to obtain proper tax returns.
Amend your prior tax returns
Back tax CPAs often find legitimate tax deductions and credits on earlier returns, especially if these were self-prepared.
“Strange but true. In my experience, back tax cases often result in a refund. Even with clients who seek out a back tax CPA only after an IRS garnishment!”
- Gary Bode, CPA tax accountant.
Pay the entire IRS demand
Sometimes families will help with loans. This is akin to eating humble pie, to be sure, but it beats having the most powerful creditor in America on your back. Selling assets may help raise cash. Some folks still have credit before the tax lien and can pay the IRS with a credit card.
Claim hardship
If I can prove the garnishment actually decreases chances of the IRS being paid, they may drop the lien.
Enter into an installment agreement with the IRS
The IRS relaxed installment agreement parameters during the recession. If you sign off and comply, the IRS may release the lien and end the garnishment.
I’m a back tax CPA in Wilmington NC, but our firm serves a wide geographical base through our virtual office. We offer a free initial phone consult. We handle many, many back tax cases, often generating a refund. Just call (910) 399-2705.
