The IRS Took All My Money
RMS Tax Consulting knows the IRS, because we were the IRS. We specialize in understanding exactly how the IRS works and what documentation is needed.
IRS wage garnishments and IRS Levies can be stopped in 3-4 business days, if done properly. One has to realize that the last resort the IRS utilizes is a wage garnishment or levy. This is one of the most lethal weapons available to the IRS. There are several ways to have the levy or garnishment released.
The first thing that has to be done is to verify that the taxpayer is in compliance with the IRS. Being in compliance means that all outstanding tax returns for every year has been filed with the IRS. Those tax returns include 1040’s, 1099’s, quarterly estimated tax payments, 941’s or 940’s, depending on the particular situation of the taxpayer.
One of the main reasons why a tax professional should contact the IRS on the taxpayers’ behalf is because the IRS will not give you any information of your compliance right away; they will immediately interrogate you first. They will try to find out what bank accounts you have, what other incomes you have and the assets you own and this is all in an effort to begin to levy, garnish, or seize any assets the taxpayer may have. A tax professional does not have to release that personal information to the IRS.
Everything is determined by the IRS computers and the automated collections division. The only way to be brought into compliance is by filing all years that were not filed. Depending on what the computer states, you may have to file 6 year’s worth of IRS tax returns or they may even go back to 15 year’s worth of taxes. This is why the IRS must be contacted immediately to figure out what needs to be done to bring the taxpayer back into compliance.
If there are compliance issues, the IRS will inform the tax professional or the taxpayer what taxes must be filed. It is important to prepare these taxes, but not to mail them in. They need to be faxed to the IRS so they are acknowledged in the IRS computers immediately and the processing of these returns can start within hours, not weeks or months; the IRS will not release the wage garnishment until the tax returns are at least submitted for processing to the IRS.
Once it is determined that a taxpayer is in compliance, the next thing the IRS is looking for is a resolution to the outstanding taxes owed to the IRS. This may be in the form of a payment plan, a partial payment plan, having the taxpayer declared non-collectible or an offer in compromise.
In most cases, the IRS will request your financial information through certain IRS forms in order to determine how much, if anything, you can afford to pay towards your total tax liability. If your file is being handled in the automated collections division, a 433F form (a simplified Collection Information Statement) has to be prepared and submitted along with supporting documentations. If the file is with a field agent, a 433A form (a detailed Collection Information Statement) has to be prepared and filed with the field agent, also along with the supporting documentation. The IRS knows that in 90% of the cases, the wage garnishment or IRS levy is a hardship on the taxpayer, and the proper procedure is that after submitting these financials, the IRS should release the wage garnishment within hours. Unfortunately, taxpayers try to perform this procedure by themselves; without a tax professional involved, the IRS simply drags their feet and prolongs the situation because it is the IRS’s position to take this drastic action due to the fact that the taxpayer did not comply with any of their prior requests. The tax professional you chose to represent you should force the IRS to comply with the rules and regulations to have these matters expedited within hours and not weeks or months.
There is a second method of having a wage garnishment or levy released; this procedure consists of proving to the IRS that this wage garnishment is a true and immediate hardship to the taxpayer. A hardship to the taxpayer is that housing, transportation or food expenses are at an immediate risk; i.e. if your electricity is about to be disconnected, and you can provide a statement from your service provider showing that your electricity is being shut off due to non-payment or if you are able to provide an eviction notice or foreclosure notice due to non-payment the same method applies. Asking the IRS to release the wage garnishment based on these facts is a very difficult task because the IRS is receiving nothing in return providing a solution to the outstanding taxes. This is an up-hill fight with the IRS but the IRS is supposed to follow procedures and in most situations the taxpayer is unable to resolve this issue without a tax professional.