Question: How do I get rid of a wage garnishment?
Answer: Your employer should provide you a copy of the wage garnishment order from the entity that is garnishing your wages. There will be a contact name and phone number on that paperwork for you to contact and make alternative payment arrangements. If you are not able to resolve the matter on your own, contact Packey Law Corporation.
Question: Can the IRS and FTB garnish my wages even though I already have a garnishment in place?
Answer: The short answer is yes. A typical wage garnishment can take up to 25% of your disposable earnings. In most circumstances, child support order takes precedent over any other wage garnishments. If the 25% disposable earnings are already accounted for in another wage garnishment order, the IRS and/or FTB will not garnish the wages. However, the IRS has on rare occasion garnished wages leaving little to live on. In these severe circumstances, it is advisable to contact our office to obtain legal representation.
Question: Can the IRS and FTB levy my bank account without notice?
Answer: The IRS provides several letters regarding unpaid balances. First a letter indicating the amount owed, then a reminder of the balances owed, then a Notice of Intent to Levy, then the IRS may levy the bank account. Ongoing tax issues without resolution efforts in place may result in a bank levy. FTB will also provide advance notice of tax balances and will levy your account without notice but these levies should not be news to you. You would have been given prior letters indicating you owe for taxes.
Question: How can I reduce the possibility of a bank levy or wage garnishment?
Answer: Set up a tax repayment plan. If you cannot afford a payment plan, you may want to contact our office to inquire about our services of a possible resolution such as an Offer in Compromise or financial hardship or Currently Not Collectible status. Ignoring the tax matter will only make it more stressful on yourself. Our office can help reduce your stress level by representing you to resolve your tax matter.
Question: What can I do to get rid of the tax problem?
Answer: There are a number of different avenues to take to resolve the tax matter. There is the Offer in Compromise, Currently Not Collectible Status, Financial Hardship, Streamline Installment Agreement, and Installment Agreement. Each have specifics as to whether you may qualify for. The Offer in Compromise is based on ability to pay. IRS, FTB, EDD, and BOE have tax resolution programs to help taxpayers resolve their tax issues. Our office have years experience dealing with resolution matters with each entity.
Question: What is an Audit and should I get representation?
Answer: An Audit is where the taxes are being examined for accuracy. Tax returns with red flags may prompt an Audit. Other times, an Audit is chosen randomly. Either case, you can probably handle an Audit on your own. Other circumstances that may advisable to obtain representation are:
- Disallowed expenses that are reasonable and necessary to conduct business,
- Audit of multiple tax years,
- Potential fraud or misrepresentation of income and expenses.
Question: Why should I hire a bookkeeper when I can do it myself?
Answer: Many companies do their own bookkeeping and file their own tax returns. This is perfectly fine. However, when your business starts growing and your profit and loss statement and balance sheet are not reconciling with your business bank account, it may prompt a tax Audit. Keeping good records from day one of your business is essential to keep your business running smooth. A professional bookkeeper can reduce the potential red flags that prompt Audits, assists in proper tax compliance, and can provide frequent financial analysis of your business so you can make effective decisions early on. Many companies do not utilize their full potential. So whether you use our professional bookkeeper or another qualified professional, bookkeeping can reduce your work load.
Question: Should I do my own tax return using online software?
Answer: Our motto is this: Leave tax preparation to the professionals. Many Americans do their own tax return every year. However, much of our new clientele have tax matters stemming from tax returns that were done themselves or by a family or friend. Tax Return software produces a majority of our tax Audit clients. It is critical to have your tax returns done by a trained professional with licensed tax software.
Question: Is there an age limit on claiming my child as a dependent?
Answer: To claim your child as your dependent, your child must meet the qualifying child test or the qualifying relative test.
- To meet the qualifying child test, your child must be younger than you and as of the end of the calendar year, either be younger than 19 years old or be a student and younger than 24 years old, or any age if permanently and totally disabled.
- There is no age limit on claiming your child as a dependent if the child meets the qualifying relative test.
Question: What are the IRS’S Collection Powers?
Unfortunately, when taxpayers wonder “Can the IRS really do that?” the answer is often yes. The IRS faces very few limitations when it comes to collection abilities. However, with Packey Law Corporation working for you against the IRS, can forestall and/or discontinue many collection efforts.
The IRS can engage in any or all of the following collection efforts to collect your back taxes owed.
- Garnishing wages. The IRS may be able to garnish your wages. They can often take between 30 and 70 percent of your wages for unpaid tax debts. This includes Social Security income, but the limits are lower for that particular income source.
- Attaching levies. The IRS can levy your bank account to collect. They will freeze the bank account so that you cannot have access to the funds and then withdraw the money, often in its entirety.
- Filing liens on property. The IRS commonly files liens on real estate for taxes. This includes your home, business, and any other real property you may own. It can also include your vehicles as well. The lien will remain effective until the debt is paid or expires.
- Seizing assets. The IRS can also sometimes take assets outright. Although this collection tactic is rare, it does occasionally occur. The IRS generally only uses this approach in large tax avoidance schemes to make a statement to other taxpayers.
Although the IRS has extensive collection abilities, taxpayers still have rights. For example, there are certain requirements that the IRS must meet regarding notice and attempts at other resolutions efforts before the IRS can start collection proceedings.