By: Gary Gagner, Emplicity Operations Manager and Overall Smarty Pants

Being tax time again, we thought it would be prudent to remind all employees, that the Internal Revenue Service will collect the taxes owed one way or another!

If you receive a notice from the IRS of taxes owed, don’t ignore it. You should contact them and seek alternative solutions. If you don’t, once the IRS sends a Notice of Levy on Wages, Salary or other Income to your employer, the levy requires your employer to deduct the amount owed including penalties and interest from the employee’s wages and remit the garnished amount directly to the IRS.

Upon receipt of a federal tax levy, 3 things happen:

1) The IRS requests information from your employer to ascertain how much you are paid

2) What is the garnished employee’s elected marital status and number of exemptions claimed on their most recent Form W-4

3) Whether you have other wage orders currently in force being deducted from your earnings

Note that Federal tax levies are processed differently than a State tax levy. The majority of States issue tax levies to withhold 25% of the disposable earnings (gross wages less mandated taxes), where the federal levy requires the garnished employee to complete part 1 & 2 of the Federal Form 668-W and a “determined” amount of your earnings become “exempt” from the Federal tax levy and ALL other earnings are deducted and remitted to the IRS.

If you receive notice from the IRS that they plan to “attach” your wages, take proactive steps to resolve the matter directly with them. If not, your employer has no option but to process the tax levy when received.

Please contact your Emplicity Payroll Professional for additional information at 877.HR.MADEZ (476-2339).