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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4491
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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recd notice of levy

Resolved Question:

rec'd notice of levy
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Lane :

Hi,

Customer:

Hello

Lane :

It sounds like they may have finally gotten things cranked back up and (as it seems I see more and more these days) they've taken it upon themselves to go at thsithrough your payroll

Customer:

Okay. I had made a payment arrangement with them and set up automatic withdrawal back in August. However, they kept sending me letters stating they were behind in processing and that my account was on "hold". Now I get this Notice of Levy. Does this mean they will take my entire paycheck? Also, my husband is on disability--will they also take that?

Lane :

You might find this IRS internal manual on serving Levys notices useful: http://www.irs.gov/irm/part5/irm_05-011-002.html

Lane :

No there is a maximum they can take

Lane :

let me get that for you

Customer:

thank you. Can they also take part or all of my husband's SS disability?

Customer:

Or just my pay?

Lane :

no no

Lane :

just yr pay ...

Customer:

Well...I guess that should make me feel better...although it doesn't!

Lane :

they MAY have the ability ... and sometimes DO take portions of SS RETIREMENT but I;ve never seen them level SS disability

Lane :

so sorry

Customer:

My husband suffered a massive stroke 3 years ago...that's how I fell behind.

Lane :

let me get thi for you

Lane :

first: a little background while I'm looking it up

Lane :


  1. Unlike other levies, a levy on a taxpayer's wages and salary has a continuous effect. It attaches to future payments, until the levy is released. Wages and salary include fees, bonuses, commissions, and similar items. All other levies only attach to property and rights to property that exist when the levy is served.



    Example:


    If a bank account is levied, it only reaches money in the account when the levy is served. It does not reach money deposited later.




Customer:

what is the difference between a levy and a garnishment?

Lane :

nothing in this case ... an account levy is a one time shot

Lane :

but a levy against wages continues

Lane :


  1. Part of the individual taxpayer's wages, salary, (including fees, bonuses, commissions and similar items) and other income, as well as retirement and benefit income, is exempt from levy.




  2. The weekly exempt amount is:




    1. The total of the taxpayer's standard deduction and the amount deductible for exemptions on an income tax return for the year the levy is served.




    2. Then, this total is divided by 52.





Customer:

Hmmm...I'm not sure how to figure what my standard deduction is.

Customer:

or my exemptions. Is there somewhere I can find this information?

Lane :

For married filing jointly the standard deducion is


Lane :

and the exemptions are 3900 for each of you and your husband

Customer:

And my minor child? Is that an exemption?

Lane :

yes, dependent exemptions are another 3900 ea

Lane :

Also, you employer SHOULD be giving you a form to fill out that ay also limit further based on your living costs

Customer:

So I would add the 12,000 plus 3,900 x3 and divide that by 52?

Lane :

tha's it

Lane :

If they try to do more than that you should refer them to: http://www.irs.gov/irm/part5/irm_05-011-002.html

Lane :

or I shoudl say exempt less than that

Customer:

Okay. One last question...do you think it would benefit me at all to contact the IRS and ask them why they did this? I received no notice other than that which said they would contact me 45 days prior to beginning my automatic bank drafts.

Customer:

I guess I'm asking is...is it too late to go back to them and see why this happened and see if I can reinstate my original installment plan?

Lane :

Absolutely ... sometimes the IRS's right arm doesn't know what the left arm is doing, so to speak ... be sure to gather all the documentation together .. so you can give all of the iotice numbers, etc (may help them "connect the dots")

Lane :

sorry for the typos "notice" numbers

Customer:

Right and I do have all of the notices. Okay, one last question, I promise! The figure that I arrived at after taking the standard deductions and the exemptions (approx. $475)--is that the amount they will leave me with or the amount they would take from each pay check if I am paid biweekly?

Lane :

That's the amount they will exempt from calculations ... in other words that's the "won't touch" money ... then, again, you employer will give you a form for listing out your household expenses and it may be that will lower the amount they DO take even further

Customer:

Yeah, I did not receive anything from my employer other than the official IRS levy notice.

Lane :

when you call ask about that as well hang on and let me see if I can find a form number for you

Lane :

Here's the site that gives the standards for what is allowed (I can't find the form) http://www.irs.gov/Individuals/Collection-Financial-Standards

Customer:

Thank you again. I will call tomorrow. I'm upset that I was not notified that this was the course they were pursuing as I've kept in contact with them, even calling them three times because they had not taken the auto bank draft. They just kept telling me that my "account was on hold" and they were running behind on processing. Seems to me they should have to notify someone before they go to the employer.

Lane :

Still looking...

Lane :

I would not be surprised at all to find that a completely different department picked it up, seeing thr length of time, and decided to do the levy That's why I would call and help them conect the dots

Lane :

As an example of the allowances, see this:


Taxpayers are allowed the total National Standards amount monthly for their family size, without questioning the amounts they actually spend. If the amount claimed is more than the total allowed by the National Standards for food, housekeeping supplies, apparel and services, and personal care products and services, the taxpayer must provide documentation to substantiate those expenses are necessary living expenses. Deviations from the standard amount are not allowed for miscellaneous expenses. Generally, the total number of persons allowed for National Standards should be the same as those allowed as exemptions on the taxpayer’s most recent year income tax return.


















































ExpenseOne PersonTwo PersonsThree PersonsFour Persons
Food $315$556$645$777
Housekeeping supplies$30$66$65$74
Apparel & services$88$162$209$244
Personal care products & services$34$60$64$70
Miscellaneous$116$209$251$300
Total$583$1,053$1,234$1,465

 












More than four personsAdditional Persons Amount
For each additional person, add to four-person total allowance:$281
Lane :

ONce you rate there, these links and all of our conversation will stay here for you ... If they try simply to levy without trying to take into account both the exempt amount and the allowances, you need to point them to the link for the national standards I gave you above (although if you call, it may not get that far)

Customer:

Well, I certainly appreciate your help on this. Will they give me a certain period of time for me to get my documentation, etc. in place or is this levy immediate?

Lane :

There should be a time frame... let me see if I can find something ... but the way, if you want to go another route completely there IS an appeals office ... that can allow you to work with someone that's not just another call center rep

Lane :

let me get THAT for you

Lane :

You may appeal many IRS collection actions to the IRS Offi ce of Appeals (Appeals). Appeals is separate from and independent of the
IRS Collection offi ce that initiated the collection action. Appeals ensures and protects its independence by adhering to a strict policy
of prohibiting certain ex parte communications with the IRS Collection offi ce or other IRS offi ces, such as discussions regarding the
strengths or weaknesses of your case

Customer:

Okay, thank you. You have been very helpful. This was devastating to me as I take care of my husband full time as well as working full time.

Customer:

I assume the levy would be in place until after the appeals process?

Customer:

In other words, the request for appeal does not stop the levy?

Lane :

If you can get the form to the very quickly many times this will stop things in their tracks

Lane :

See thois:

Lane :

Collection Due Process (CDP) is available if you receive one of the following notices:
• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
• Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice
Collection Appeals Program (CAP) is available for the following actions:
• Before or after the IRS fi les a Notice of Federal Tax Lien
• Before or after the IRS levies or seizes your property
• Termination, or proposed termination, of an installment agreement
• Rejection of an installment agreement
• Modifi cation, or proposed modifi cation, of an installment agreement

Lane :

Use this form:

Lane :

If they get it before the process is started you may be able to tell the whole story to one person

Customer:

I never got any of those notices. Only the one my employer sent literally hours ago saying it was basically a done deal.

Customer:

Never got a letter of intent, etc.

Lane :

Form 12153

Lane :

any notice of Levy gives you the right to take this to the appeak ... notice, also, the Rejection of an installment agreement is on there ... your grounds should be that you were promised one thing and the out of the blue ou get this levy notice

Lane :

Also notice n the form it says this: "


Call the phone number on the notice or 1-800-829-1040 if you are not sure about the correct address
or if you want to fax your request."

Customer:

Okay, you have given me some hope! Now, they cannot attack my bank account, correct? My husband's SS disability is direct deposited.

Lane :

They COULD, but that would be a one time levy AND you would get a notice of that beforehand as well ... this is an indication that the (someone there) has deided to go a different way (seeing that there is a regular income there)

Lane :

I would call, explain and ask for the fax number to send in the 12153 all on one call .. then shoot it in as quickly as possible

Lane :

Depending on how the call goes, tat gves you some backup

Customer:

Okay, I will certainly do that. I thank you very much again. I appreciate your time.

Lane :

Your excellent rating is thanks enough!

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Customer:

Absolutely and thank you again. Have a nice evening :)

Lane :

Br proactive in my experience, if you get to them before they get to you, your result is always better

Lane :

You too

Customer:

Exactly my plan! Of course...I thought I WAS being proactive! I shall try again.

Lane :

Get some sleep tonight

Customer:

It'll be tough but I'll try. Good night!

Lane :

Sounds like you were ... maybe now you have a couple more fronts on which to attack

Lane :

I'd start with the 12153... Good evening

Lane :

Sorry, you can rate now

Lane :

(had the info request buttom checked, so I could be sure i got the form to you

Customer:

thanks!

Lane :

Thanks again

Lane :

If you'd like to work with me again, you can either (1) add me as a preferred experton your home page, (2) say “For Lane only,” at the biginning of another question OR (3) use my profile page: here http://www.justanswer.com/finance/expert-npvadvisor/


 


 


Thanks again,


 


Lane

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4491
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 9 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks for the rating Lori.

As you get further in, if you want to ask for me again, just go here: Lane

... and there's a box where you can enter your questions


Thanks again,

Lane

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Lane
Lane
JD, MBA, CFP, CRPS
3630 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986