Ronald J. Cappuccio, J.D., LL.M.(Tax) Lawyer nj tax attorney


 
Home
Search
Tax Audits and Collections
Tax and Estate Planning
Tax FAQ's
Tax Issues
Business Planning Issues
Limited Liability Companies
LLC FAQ's
Business FAQ's
Choose the Best Legal Entity for your Business
Free Email Newsletter
Weblog News!

Handling an IRS Notice of Levy

   
If you have received a Notice of Levy from the IRS of an employee's wages or for monies owed to a creditor, you have obligations as well as rights. First, remember that the Notice of Levy is not for taxes that you owe, but rather is for taxes that may be owed by the person levied upon. Under Federal and State Law, a wage execution cannot be cause for terminating an employee.    

What Has to be Paid to The IRS?   

Wage Execution

    The employee completes part four of the form indicating their marital status and exemptions. As the employer, you calculate the amount to be withheld from the employee's wages and turned over to the Internal Revenue Service.

    Frequently, new and lower paid employees quit employment upon the wage execution because there is little incentive for them to work with a significant portion of money being paid to the Internal Revenue Service. Therefore, you should encourage them to seek advice of a tax attorney to resolve their tax problems. 

Other Levies

    If you owe money to a creditor and you receive a levy, you are required to discontinue making payments to that creditor. Nevertheless, you are not required to pay anything to the Internal Revenue Service unless you are going to pay that to the creditor. For example, if you choose not to pay the creditor for any reason, you do not have to pay the Internal Revenue Service either. The IRS can only collect monies that are actually due and owing to the creditor, and they cannot force you to pay additional monies, disputed monies, or monies that you have chosen not to pay the creditor for any reason. Your liability to the Internal Revenue Service is only based upon a payment to the creditor instead of the Internal Revenue Service after a Notice of Levy is issued. 



Conclusion - Action

Wage Execution

   

   1. Talk to the employee directly, have the employee immediately complete part 4 of the wage execution to determine what the salary would be.


   2. Encourage the employee to get assistance from a tax attorney to resolve the matter. Usually, tax problems are the result of other financial problems.


   3. Withhold the appropriate amounts from the employee and pay that to the Internal Revenue Service as calculated on the payment schedule.
  

Other Levies

   

   1. You do not have to pay the Internal Revenue Service any disputed amounts or amounts in which you believe are not owed to the creditor.


   2. Do not pay the creditor, rather pay the amounts due to the Internal Revenue Service.


   3. Verify the correct name on the levy. Only pay the IRS for the creditor named on the levy. Do not pay the IRS if monies are owed to a creditor with a different name.


Ronald J. Cappuccio, J.D., LL.M.(Tax)
Counsellor at Law
1800 Chapel Avenue West, Suite 128
Cherry Hill, NJ 08002 USA
Phone (856) 665-2121
Fax (856) 665-9005
Email: Ron@TaxEsq.com

© Copyright 1996-2008 Ronald J. Cappuccio, J.D., LL.M.(Tax) All Rights Reserved