If you owe taxes to the IRS or State and ignore the problem, don’t be surprised if they respond with a “call to action”. A common way the IRS wakes up a delinquent taxpayer is to garnish their wages. If you are self-employed or in another situation where you don’t get a paycheck, you may be thinking “this is not a problem for me”.
While it is true that you do not receive a paycheck and therefore cannot have your wages garnished, that does not stop the IRS. They have an “ace in the3rd Party Levy hole”…a 3rd party levy. Not only does this procedure overcome the inability to garnish one’s wages, it’s worse.
You Get Nothing
A 3rd party levy requires your customers to remit 100% of the money they owe you over to the IRS until the taxes are paid in full. If you are thinking you can work something out with the customer, you should know that if they fail to comply, they are personally responsible to pay the government any amount they give to you once the levy is in effect.
No one can afford to live on $0 and the IRS know this. They take this action not to place an undue burden on the taxpayer but rather incentivize them to negotiate a more realistic payment plan.
We Can Help
Nonetheless facing the possibility of working for nothing is scary. With more than 25 years experience, The Tax Resolution Institute has been extremely successful helping taxpayers remove 3rd party levies and entering them into agreements they can live with. Instead of facing an impossible situation, call us today and use your unfortunate situation as leverage to negotiate a suitable agreement.