A notice of levy is a written letter that explains the conditions of the tax penalty. The notice states that the IRS has the legal right to collect an unpaid debt by levying actions like wage garnishment, bank account holds, and property seizure.
Which form tells an employer they may stop withholding for a federal tax levy?
Form 668-W
IRS Publication 1494 PDF (PDF), which is mailed with the Form 668-W(ICS) or 668-W(C)DO, explains to the employer how to compute the amount exempt from levy. A levy includes a Statement of Dependents and Filing Status. The employer gives this statement to the employee to complete and return within three days.
How long does an employer have to pay a levy?
Employers generally have at least one full pay period after receiving a Form 668-W(ICS) or 668-W(C)DO, Notice of Levy on Wages, Salary and Other Income (or other levy form) before they are required to send any funds from their employee’s wages to the IRS.
When to use notice of levy on wages, salary, and other income?
The Notice of Levy on Wages, Salary, and Other Income (Form 668-W) was developed for use when an individual may be entitled to the minimum exemption from levy in IRC 6334(a)(9) and includes a Statement of Dependents and Filing Status. The employer gives the statement to the taxpayer to complete and return within three days.
Can a employer accept a revised W-4 after a wage Levy?
Employers cannot accept a revised W-4 from an employee following receipt of a wage levy. The method of payment, such as direct deposit, has no bearing on a wage levy. Only use the 2006 table for levies issued in 2006.
Can a employer terminate an employee because of a wage Levy?
Exemptions must be calculated in accordance with IRS Publication 1494 as discussed below. It is generally a violation of federal and state laws for employers to take adverse action, such as terminating an employee, because of a wage levy (or any other garnishment for indebtedness). 10
