Did you recently receive a Form 668 W? The IRS sends an employer Form 668 W when they plan to levy an employee’s wages, including salary, commissions, and bonuses. Here we’ll outline the next steps for both employers and employees when the IRS wage levy is issued.
Next Steps for Employers
Employers will receive a copy of Form 668 W when an employee has failed to respond to the IRS concerning an outstanding debt. Typically, the taxpayer will have a full pay period, up to 10 days, before the employer must start sending a portion of the employee’s wages to the IRS. It’s important to take action right away.
Provide your employee parts 2, 3, 4, and 5 of the form. Request that they sign the Statement of Exemptions and Filing Status and return it to you within 3 days. You’ll then need to determine the net pay minus exemptions, and send this, along with part 3 of the wage levy, to the IRS prior to the upcoming payroll period. To calculate exemptions, use IRS Publication 1494.
Notify your Human Resources department or third party payroll processing service about the levy as soon as possible. As an employer, you are required to comply with the wage levy in a timely manner, or risk being liable for the debt, plus an additional penalty. Note, as well, that it is against federal law to take an adverse action, like termination of the employee when a levy is issued. The wage levy will continue until the debt is paid or the IRS notifies you that the levy has been released.
Next Steps for Employees
The levying of wages is one of the final steps in the process to repay the IRS. If your employer has received Form 668 W, it should have followed a Notice and Demand for Payment, as well as a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. If you do not respond to these requests from the IRS, Form 668 W will be issued.
Complete the Statement of Exemptions and Filing Status provided by your employer. You’ll need to include information about your filing status, number of dependents, and pay period. This information will help to determine the amount of wages that will be sent to the IRS each pay period. Once the levy begins, it will continue until you’ve paid off the debt, or arranged a payment plan with the IRS, or you’ve proven that the levy has created a financial hardship.
If you feel that the levy will, in fact, create a financial hardship for your family, most obviously do create an extreme hardship. The levy actions need to be challenged. You should be aware of your options. How to best position yourself to address not only the levy actions, but an overall strategy to address the back-tax debts.
Get Tax Debt Help
It can be hard to navigate a IRS wage garmishment levy, or any IRS collection action on your own. Whether you are an employer looking for guidance on how to submit documentation correctly, or you’re an employee concerned about making ends meet… Please contact David or Gerald Yarborough to see what options are best to address your delinquent tax liabilities.
We are a local, family owned company and both of our owners are former IRS employees (that means we have first-hand knowledge about how the IRS and State DOR operates and we use this knowledge to our clients’ advantage). Our company has been helping people just like you for over 40 years. You get Straight Talk when you speak with us, no empty promises that sound too good to be true. Contact Us by Requesting a Consultation or calling 1-800-270-8616.